1. For a coupon bond, the face value (F) represents the amount that the 1 point issuer initially borrows. * O True False 2. A coupon rate is the fixed interest rate that the bond issuer pays through 1 point the lifetime of the bond. * True False 3. A US treasury bill is an example of a coupon bond. * 1 point True False 4. The coupon payment (C) and the Face Value (F) on a coupon bond 1 point change over time just as prices and interest rates of bonds change over time. True False 5. Consider a coupon bond with 15 years to maturity. In this case, if we are 1 point setting up the PV (equation), then we are summing up 15 future payments. O True False 6. Consider a coupon bond with n=10, Face Value of $800, and Coupon rate 1 point of 5%. If coupon payments are made annually what is C equal to? * $80 $40 $10 7. Consider a coupon bond with n=10, Face Value of $8000, and Coupon 1 point rate of 5%, that has just been issued. What is today's value of the bond?* $9000 $8000 $7000 More information is needed to answer the question 8. The face value of a coupon bond is today's value of a coupon bond. * 1 point O True False 9. At the time of issue the value of the bond is its face value. * 1 point True False 10. The yield to maturity always equals the coupon rate when the bond sells 1 point at par. True False 11. The coupon rate and the yield to maturity are negatively rated with the 1 point bond price. * O True False 12. The current yield is a better approximation of the yield the lower the n. * 1 point O True False 13. Consider a coupon bond with several years to maturity, F=$5000, and a 1 point coupon rate = 2.5%. If the bond is currently selling at discount, then the yield to maturity is: * O Greater than the coupon rate O Equal to the coupon rate O Lower than tehe coupon rate None of the above 14. Discuss the relationship between the rate of capital gains, the rate of return, and the yield to maturity for a coupon bond and a discount bond. * Your answer 15. When a bondholder purchases a newly issued bond and holds this bond until maturity, then what is the yield to maturity on this bond equal to? (provide a brief esponse to support your answer) * Your answer 16. Can the coupon rate of a bond change over time? Why? (provide a 0 points brief response to support your answer) * Your answer 17. Why would a bond holder sell a bond if that bond's interest rate has 0 points increased? Discuss. *