1)The market price is $750 for a 14-year bond ($1,000 par value) that pays 12 percent annual interest, but makes interest payments on a semiannual basis (6 percent semiannually). What is the bond's yield to maturity?

Part 1

The bond's yield to maturity is ________

2) A bond's market price is $825. It has a $1,000 par value, will mature in 6 years, and has a coupon interest rate of 11 percent annual interest, but makes its interest payments semiannually. What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 12 years? What if it matures in 3 years?

Part 1

a.The bond's yield to maturity if it matures in 6 years is _______

3) The Saleemi Corporation's $1,000 bonds pay 8 percent interest annually and have 12 years until maturity. You can purchase the bond for $1,155.

a.What is the yield to maturity on this bond?

b.Should you purchase the bond if the yield to maturity on a comparable-risk bond is 5 percent?