1. An XYZ April 2041 bond with a 5.5% coupon Interest rate and a par value of $1,000 recently had a price of 95.625. Calculate the following: a. When will the bond mature? b. How much will you have to pay to purchase this bond? c. What is the current yield of the bond? 2. As a bond approaches maturity, the premium (or discount) reduces to zero. Prove this by calculating the sales price with 7 and 2 years remaining to maturity for the following two bonds. Assume a constant yield to maturity of 8%. a. A 10-year, 10% annual coupon bond b. A 10-year, 6% annual coupon bond c. Explain why the premium or discount reduces to zero as a bond approaches maturity. 3. An investor is considering purchasing a bond with a 4 % coupon interest rate, a par value of $1,000, and a market price of $102.55. The bond will mature in 4 years. a. What is the bond's current yield? b. What is the bond's yield to maturity? 4. three friends,jodie, natalie, and neil

1. An X2April 2042 bond with a 5.5% coupon interest rate and a par value of $51000 recently had aprice of 95.625 , Calculate the following: a. When will the bond mature? b. How much will you have to pay to purchase thls bond? c. What is the current vileld of the bond? 2. As a bond approsches maturity, the premium (or disceint) reduces to zero. Prove this by calculating the sales price with 7 and 2 years remalning to maturity for the following two bonds. Acsume a constant vild to maturity of 8x. a. A 10year, 10% annual coupon bond b. A 10year, 6% annual coupon bond C. Explain why the premlum or discount reduces to zero as a bond approaches maturity. 3. An investor is considering purchasing a bond with a 4% coupon intereat rates a par value of $1,000, and a market price of $102.55, The bond will mature in 4 years. a. What is the bond's current vleld? b. What is the bonds vild to maturity? 4. Three firiends, Jodle, Natalle, and Nell have asked you to determine the equivalent taxable yield on a munidipal bond. The bond's current yield is 3.75% with 5 years left until maturity. Jodle is in the 15% marginal tax bracket, Natalie is in the 25% bracket and Neil is in the 35% bracket. Calculate the equivalent taxable yield for your 3 friends. Assuming a similar AAA rated corporate bond yields 4%, which of your 3 fitiends should purchase the municipal bond