Question
15.Terrific Towels. Inc. just issued a bond with a $1,000 face value and a coupon rate of 6.5%. If the bond has a life of
15.Terrific Towels. Inc. just issued a bond with a $1,000 face value and a coupon rate of 6.5%. If the bond has a life of 20 years, pays semi-annual coupons, and the yield to maturity is 7.80%, what will the bond sell for?
A. $794.45
B. $896.20
C. $869.41
D. $852.69
E. $436.49
16.Terrific Towels. Inc. issued a bond with a $1,000 face value and a coupon rate of 6.5%. If the bond has a life of 19 years, pays semi-annual coupons, and the yield to maturity is 7.80%, what will the bond sell for?A. $794.45B. $882.20C. $872.28D. $864.69E. $404.93
17.Which of the following bonds will have the largest percentage increase in value if interest rates decrease by 1%?
A.2-year, 5% coupon bond
B.30-year, 10% coupon bond
C.10-year, zero coupon
D.30-year, zero coupon
E.It is the same for all of the coupons
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