[1.] A coupon bond that pays semiannual interest is reported in theWall Street Journalas having an ask price of 116% of its $1,000 par value. If the last interest payment was made 3 months ago and the coupon rate is 5.90%, the invoice price of the bond will be _________.

a. $1,160.00

b. $1,189.50

c. $1,174.75

d. $1,130.50

[2.] You buy a bond with a $1,000 par value today for a price of $890. The bond has 6 years to maturity and makes annual coupon payments of $78 per year. You hold the bond to maturity, but you do not reinvest any of your coupons. What was your effective EAR over the holding period?

a. 10.35%

b. 7.41%

c. 10.76%

d. 8.70%

[3.] Assuming semiannual compounding, a 15-year zero coupon bond with a par value of $1,000 and a required return of 11.4% would be priced at _________.

a. $189.56

b. $198.03

c. $897.67

d. $946.07

[4.] A bond with a 9-year duration is worth $1,089, and its yield to maturity is 8.9%. If the yield to maturity falls to 8.65%, you would predict that the new value of the bond will be approximately _________.

a. $1,086.28

b. $1,089.00

c. $1,111.54

d. $1,091.72

[5.]A fixed-income portfolio manager sets a minimum acceptable rate of return on the bond portfolio at 4.0% per year over the next 3 years. The portfolio is currently worth $10 million. One year later interest rates are at 5.0%. What is the portfolio value trigger point at this time that would require the manager to immunize the portfolio?

a. $11,248,640

b. $10,202,848

c. $9,716,998

d. $10,400,000