1. A bond's market price is $925. It has a $1,000 par value, will mature in 14 years, and has a coupon interest rate of 12 percent annual interest, but makes its interest payments semiannually. What is the bond's yield tomaturity? What happens to the bond's yield to maturity if the bond matures in 28 years? What if it matures in 7 years?

a.The bond's yield to maturity if it matures in 14 years is %.

b.The bond's yield to maturity if it matures in 28 years is %.

c.The bond's yield to maturity if it matures in 7 years is %.

2.(Bond valuation) Doisneau 18-year bonds have an annual coupon interest of 11 percent, make interest payments on a semiannual basis, and have a $1,000 par value. If the bonds are trading with a market's required yield to maturity of 14 percent, are these premium or discount bonds? Explain your answer. What is the price of the bonds?

a. If the bonds are trading with a yield to maturity of 14%, then (Select the best choice below.)

A.the bonds should be selling at a discount because the bond's coupon rate is less than the yield to maturity of similar bonds.

B. there is not enough information to judge the value of the bonds.

C. the bonds should be selling at par because the bond's coupon rate is equal to the yield to maturity of similar bonds.

D.the bonds should be selling at a premium because the bond's coupon rate is greater than the yield to maturity of similar bonds.

(b)The price of the bonds is

3. (Yield to maturity)The Saleemi Corporation's $1,000 bonds pay 8 percent interest annually and have 14 years until maturity. You can purchase the bond for $1,075.

a.What is the yield to maturity on this bond?

b.Should you purchase the bond if the yield to maturity on a comparable-risk bond is 9 percent?

(a).The yield to maturity on the Saleemi bonds is %.

(b).You should not should purchase the bonds because your yield to maturity on the Saleemi bonds is less greater than the one on a comparable risk bond. (Select from the drop-down menus.)