Question
1) a) A semiannual coupon bond with a coupon rate of 9% and face value of $1000 trades at $900. It matures in 15 years.
1) a) A semiannual coupon bond with a coupon rate of 9% and face value of $1000 trades at $900. It matures in 15 years. What is its yield to maturity (YTM)? Answer in percent and round to two decimal places.
2) A 5 year semiannual coupon bond with a face value of $1000 trades at $878. The market-determined discount rate is 6%. What is the coupon rate? Answer in percent and round to two decimal places.
3) A zero coupon bond with a face value of $1000 that matures in 18 years sells today for $558. What is the yield to maturity? (Use annual compounding.) Enter in percent to two decimal places.
4)Which of the following is true of longer maturity bonds?
a) | They tend to have negative yields. |
b) | There is no relationship between maturity and yield. |
c) | They generally have higher yields than bonds with shorter maturities. |
d) | They generally have lower yields than bonds with shorter maturities.
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