1. Calculate the price of a 5.4 percent coupon bond with 10 years left to maturity and a market interest rate of 5.0 percent. (Assume interest payments are semiannual.)(Do not round intermediate calculations and round your final answer to 2 decimal places.)

Bond price

$

Is this a discount or premium bond?

Discount bond

Premium bond

2. Whats the current yield of a 4.20 percent coupon corporate bond quoted at a price of 101.78?

3. Whats the taxable equivalent yield on a municipal bond with a yield to maturity of 3.8 percent for an investor in the 28 percent marginal tax bracket?

4. A client in the 37 percent marginal tax bracket is comparing a municipal bond that offers a 5.70 percent yield to maturity and a similar-risk corporate bond that offers a 7.05 percent yield.

Determine the equivalent taxable yield.(Round your answer to 2 decimal places.)

Equivalent taxable yield

%

Which bond will give the client more profit after taxes?

Municipal bond

Corporate bond

5. A 7.50 percent coupon bond with 13 years left to maturity is priced to offer a 8.2 percent yield to maturity. You believe that in one year, the yield to maturity will be 7.8 percent.What is the change in price the bond will experience in dollars?