1. Wine and Roses, Inc. offers a 5.0 percent coupon bond with semiannual payments and a yield to maturity of 5.63 percent. The bonds mature in 5 years. What is the market price of a $1,000 face value bond?

a)$1,215.28

b)$987.79

c)$1,757.59

d)$972.87

e)$1,188.16

2. Which one of the following bonds is the least sensitive to changes in market interest rates?

Zero coupon, 10 year

6 percent annual coupon, 10 year

Zero coupon, 4 year

8 percent annual coupon, 4 year

6 percent annual coupon, 4 year