Question
1.The bonds of Lapeer Airlines, Inc., are currently trading on the market at $1,119.34. They have a par value of $1000, make semi-annual coupon payments
1.The bonds of Lapeer Airlines, Inc., are currently trading on the market at $1,119.34. They have a par value of $1000, make semi-annual coupon payments with a coupon rate of 6.4%, and a YTM of 4.6%. How many years until these bonds mature?
2.You have decided to try to make a fortune by buying the bonds of distressed companies. You have found a C-rated bond that has a YTM of 29.6%, a coupon rate of 5.2% with semi-annual coupon payments, a par value of $1000, and 4.5 years remaining until maturity. What is the most you should be willing to pay for this bond?
3. True or False: A discount bond is one in which its YTM is lower than its Coupon Rate.
4. A bond has a par value of $1000, a coupon rate of 5%, 24.5 years remaining until maturity, and makes semi annual payments. You can currently buy the bond on the market for $1000. What is the bond's YTM?
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Less than 5%
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5%
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More than 5%
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There is not enough information provided to determine the YTM.
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