1) Floating-rate loans) The Bensington Glass Company entered into a loan agreement with thefirm's bank to finance the firm's working capital. The loan called for a floating rate that was 27 basis points (0.27 percent) over an index based on LIBOR. In addition, the loan adjusted weekly based on the closing value of the index for the previous week and had a maximum annual rate of 2.17 Percent and a minimum of 1.74 percent. Calculate the rate of interest for weeks 2 through 10.

Date	LIBOR
Week 1	1.981.98%
Week 2	1.641.64%
Week 3	1.511.51%
Week 4	1.341.34%
Week 5	1.611.61%
Week 6	1.621.62%
Week 7	1.651.65%
Week 8	1.891.89%
Week 9	1.891.89%

The rate of interest for week 2 is %. (Round to two decimal places.) __________________

2) (Bond valuation) Calculate the value of a bond that matures in 14 years and has a $1,000 par value. The annual coupon interest rate is 9 percent and the market's required yield to maturity on a comparable-risk bond is 11 percent.

The value of the bond is $(Round to the nearest cent.) __________________

3) (Bond valuation) A bond that matures in 20 years has a $1,000

par value. The annual coupon interest rate is 11 percent and the market's required yield to maturity on a comparable-risk bond is 16 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually?

a. The value of this bond if it paid interest annually would be $ (Round to the nearest cent.) ____________

4) (Bond valuation) Pybus, Inc. is considering issuing bonds that will mature in 17 years with an annual coupon rate of 7 percent. Their par value will be $1,000, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 11 percent. However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an Arating, the yield to maturity on similar A bonds is 12 percent. What will be the price of these bonds if they receive either an A or a AA rating?

a. The price of the Pybus bonds if they receive a AA rating will be $ (Round to the nearest cent.) ___________________

5) (Yield to maturity) The market price is $1,075 for a 99-year bond ($1,000 par value) that pays11 percent annual interest, but makes interest payments on a semiannual basis (5.5 percent semiannually). What is the bond's yield tomaturity?

The bonds yield to maturity is ___________ %. (Round to two decimal places.)

6) (Bond valuation) Doisneau 18-year bonds have an annual coupon interest of 8 percent, make interest payments on a semiannual basis, and have a $1,000 par value. If the bonds are trading with a market's required yield to maturity of 13 percent, are these premium or discount bonds? Explain your answer. What is the price of the bonds?

a. If the bonds are trading with a yield to maturity of 13%, then (Select the best choice below.)

A. the bonds should be selling at a premium because the bond's coupon rate is greater than the yield to maturity of similar bonds.

B. there is not enough information to judge the value of the bonds.

C. the bonds should be selling at par because the bond's coupon rate is equal to the yield to maturity of similar bonds.

D. the bonds should be selling at a discount because the bond's coupon rate is less than the yield to maturity of similar bonds.