1. A coupon bond is purchased for $875 with 5 years of maturity period. The coupon payment of $45 to be paid at the end of each half year. If the desired rate of return is 12% p.a. effective, then the face value of the bond is: A. $958.35

B. $953.62

C. $1,313.35

D. $1,100.00

2. A $1000 bond that pays interest J2 = 10% p.a. is redeemable at par at the end of 5 years. The purchase price of the bond to yield an investor 15% p.a. compounded semi-annually is:

A. $1,250.00

B. $664.78

C. $832.39

D. $828.40

3. A $1000 bond is redeemable at par at the end of 5 years. The purchase price of the bond is $950 and yields an investor 10% p.a. compounded semi-annually. Calculate the annual effective coupon rate?

A. 4.48%

B. 8.70%

C. 4.35%

D. 8.89%

4. An education institution decides to issue $4,000,000 in bonds to construct a state-of-the-art research center. The institution is required to set-up a sinking fund where it will need to deposit a fixed amount every end of 6 months paying 8% compounded semi-annually. At the end of the 12 years, the bond obligation will be retired. The mandatory deposit required in the fund foe each half year is:

A. $102,347.33

B. $262,347,33

C. $98,410.89

D. $252,257.04

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