1 Consider a 20-year bond with a face value of $ 1 comma 000 that has a coupon rate of 5.8 %, with semiannual payments.

a. What is the coupon payment for this bond?

b. Draw the cash flows for the bond on a timeline.

a. What is the coupon payment for this bond?

The coupon payment for this bond is $

Nothing. (Round to the nearestcent.)

b. Draw the cash flows for the bond on a timeline.

Select the timeline below that shows the correct cash flows for this bond. (Select the best choicebelow.)

A.

The timeline starts at Period 0 and ends at Period 40. The timeline shows a cash flow of $ 29.00 each from Period 1 to Period 39. In Period 40, the cash flow is $ 1,029.00.

Period012nothing3940

Cash Flows nothing$ 29.00$ 29.00nothing$ 29.00$ 1,029.00

B.

The timeline starts at Period 0 and ends at Period 20. The timeline shows a cash flow of $ 29.00 each from Period 1 to Period 19. In Period 20, the cash flow is $ 1,029.00.

Period012nothing1920

Cash Flows nothing$ 29.00$ 29.00nothing$ 29.00$ 1,029.00

C.

The timeline starts at Period 0 and ends at Period 20. The timeline shows a cash flow of $ 29.00 each from Period 1 to Period 19. In Period 20, the cash flow is $ 1,000.

Period012nothing1920

Cash Flows nothing$ 29.00$ 29.00nothing$ 29.00$ 1,000

D.

The timeline starts at Period 0 and ends at Period 40. The timeline shows a cash flow of $ 29.00 each from Period 1 to Period 39. In Period 40, the cash flow is $ 1,000.

Period012nothing3940

Cash Flows nothing$ 29.00$ 29.00nothing$ 29.00$ 1,000

2 Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods):

The timeline starts at Period 0 and ends at Period 50. The timeline shows a cash flow of $ 19.31 each from Period 1 to Period 49. In Period 50, the cash flow is $ 19.31 plus $ 1,000.

Period012nothing4950

Cash Flows nothing$ 19.31$ 19.31nothing$ 19.31$ 19.31 plus $ 1,000

a. What is the maturity of the bond(in years)?

b. What is the coupon rate(as apercentage)?

c. What is the facevalue?

a. What is the maturity of the bond(in years)?

The maturity is

Nothing years. (Round to the nearestinteger.)

b. What is the coupon rate(as apercentage)?

The coupon rate is

Nothing%.(Round to two decimalplaces.)

c. What is the facevalue?

The face value is $

Nothing.(Round to the nearestdollar.)

3 Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods):

The timeline starts at Period 0 and ends at Period 20. The timeline shows a cash flow of $ 20.00 each from Period 1 to Period 19. In Period 20, the cash flow is $ 20.00 plus $ 1,000.

Period012nothing1920

Cash Flows nothing$ 20.00$ 20.00nothing$ 20.00$ 20.00 plus $ 1,000

a. What is the maturity of the bond(in years)?

b. What is the coupon rate(as apercentage)?

c. What is the facevalue?

a. What is the maturity of the bond(in years)?

The maturity is

Nothing years. (Round to the nearestinteger.)

b. What is the coupon rate(as apercentage)?

The coupon rate is

Nothing%.(Round to two decimalplaces.)

c. What is the facevalue?

The face value is $

Nothing.(Round to the nearest dollar.)

4 Your company wants to raise $9.0 million by issuing 15-year zero-coupon bonds. If the yield to maturity on the bonds will be 4 % (annual compounded APR), what total face value amount of bonds must youissue?

The total face value amount of bonds that you must issue is $

Nothing.(Round to the nearestcent.)