1.Two years ago bonds were issued with 10 years until maturity, selling at $1,050, and a 7% coupon with semi-annual interest payments. If interest rates for that grade of bond have not changed, what will be the market price of these bonds? A. $917.06 B. $1035.82 C. $1,042.32 D. $1,000.00 2. What happens to the price of a three-year bond with a 12% coupon, that pays interest semi-annually, when interest rates change from 12% to 6%? A. A price decrease of $51.54 B. A price increase of $162.52 C. A price increase of $160.38 D. No change in price | 3. How much would an investor lose if she purchased a 40-year zero-coupon bond with a $1,000 par value and 10% yield to maturity, only to see market interest rates increase to 13% one year later? Interest is compounded semi-annually. (Hint: How much would the price change from a year earlier?) A. decrease by $12.82 B. decrease by $13.58 C. $23.93 D. $25.66 4. For a fixed rate debt bond, which of the following factors will change when interest rates change? A. The expected cash flows from a bond B. The present value of the bond's future fixed cash flows C. The coupon payment of a bond D. The maturity value of a bond 5. What happens when a bond's expected cash flows are discounted at a rate higher than the bond's coupon rate? A. The price of the bond increases. B. The price of the bond will be less than $1,000. C. The par value of the bond decreases. D. The coupon payments will be adjusted to the new discount rate