1.Walmart Inc. has semiannual coupon bonds with 7% coupon rate and 16 years remaining to maturity. The bonds are selling for 126% of par value. What is the (annual) yield of maturity of the bonds? Note that the price is % of par value. For example, 120% suggests $1,200 price for $1,000 par value (or $120 price for $100 par value)

Yield to maturity = __________%

2.

Which of the following IBM bonds is sold at premium?

Group of answer choices

Coupon rate 5%; time to maturity 10 years; yield to maturity 10%

Coupon rate 10%; time to maturity 30 years; yield to maturity 8%

Coupon rate 6%; time to maturity 30 years; yield to maturity 8%

Coupon rate 10%; time to maturity 20 years; yield to maturity 10%

Not enough information

3.

Analysts anticipate that Central Bank of England will increase interest rates to stimulate economy. There are three bonds currently available in the market. What will happen with these bonds.

Complete the sentence by choosing appropriate answers.

	Penguin Bonds	HarperCollins Bonds	Pearson Bonds
Coupon rate	8%	8%	5%
Time to maturity (years)	20	30	30

Prices of all bonds will [ Select ] ["rise", "drop"] . [ Select ] ["Penguin bonds", "HarperCollins bonds", "Pearsons bonds"] will change the most while [ Select ] ["Penguin bonds", "HarperCollins bonds", "Pearson bonds"] will change the least.