1.A 15 year, 8%, $1000 face value bond is currently trading at $958. The yield to maturity of this bond

must be

a. less than 8%.

b. equal to 8%.

c. greater than 8%.

d. unknown.

2A bond that grants the investor the right to exchange their bonds for common stock, is called a a. zero-coupon bond. b. Treasury bond. c. convertible bond. d. mortgage bond.

3Of the following bonds, which one has the highest degree of interest rate risk? a. 20 year 8% bond b. 5 year 8% bond c. 10 year 8% bond d. Not enough information.

4. Which of the following information cannot be found in a bonds indenture? a. The coupon rate. b. The maturity of the bond. c. The price of the bond. d. None of the above. 5. Bonds issued by US states or local governments are called... a. Treasury bonds. b. Municipal bonds. c. Corporate bonds. d. Yankee bonds. 6. Bavarian Sausage just issued a 10 year 7% coupon bond. The face value of the bond is $1,000 and the bond makes annual coupon payments. If the required return on the bond is 10%, what is the bonds price? a. $815.66 b. $923.67 c. $1,000.00 d. $1,256.35

7. Bavarian Sausage just issued a 10 year 7% coupon bond. The face value of the bond is $1,000 and the bond makes semiannual coupon payments. If the required return on the bond is 10%, what is the bonds price? a. $815.66 b. $1,000 c. $813.07 d. $1,035.27

8. Bavarian Sausage just issued a 10 year 12% coupon bond. The face value of the bond is $1,000 and the bond makes annual coupon payments. If the required return on the bond is 10%, what is the bonds price? a. $815.16 b. $1,000 c. $1,122.89 d. $1067.24