• 2) Two bonds have identical times to maturity and coupon rates. One is callable at 105, the other at 110. Which should have the higher yield to maturity? Why?
• 3) The stated yield to maturity and realized compound yield to maturity of a (default-free) zero-coupon bond are always equal. Why?
• 4) Why do bond prices go down when interest rates go up? Don't bond lenders like to receive high interest rates?
• 5) A bond with an annual coupon rate of 4.8% sells for $970. What is the bond's current yield?