21 A bond with a ten percent coupon rate bond pays interest semi annually Par value is $1,000 The bond has three years to maturity The investors' required rate of return is 12 percent What is the present value of the bond a $1,021 b $1,000 c $981 d $951 e none of the above 22 A bond with a 12 percent quarterly coupon rate has a yield to maturity of 16 percent The bond has a par value of $1,000 and matures in 20 years Based on this information, a fair price of this bond is $ a 1,302 b 763 c 761 d 1,299 23 From the perspective of investing institutions, the most attractive foreign bonds offer a and are denominated in a currency that over the investment horizon a high yield appreciates b high yield remains stable c low yield appreciates d low yield depreciates 24 The value of risk securities will be relatively a high high b high low c low low d none of the above 25 The larger the investor's relative to the , the larger the of a bond with a particular par value a discount rate required rate of return discount b required rate of return discount rate discount c required rate of return discount rate premium d none of the above 26 A(n) in the expected level of inflation results in pressure on bond prices a increase upward b increase downward c decrease downward d none of the above 27 Lisa can purchase bonds with 15 years until maturity, a par value of $1,000, and a 9 percent annualized coupon rate for $1,100 Lisa's yield to maturity is percent a 9 33 b 7 84 c 9 00 d none of the above 28 An insurance company purchases corporate bonds in the secondary market with six years to maturity Total par value is $55 million The coupon rate is 11 percent, with annual interest payments If the expected required rate of return in 4 years is 9 percent, what will the market value of the bonds be then a $52,115,093 b $55,341,216 c $55,000,000 d $56,935,022 29 A $1,000 par bond with five years to maturity is currently priced at $892 Annual interest payments are $90 What is the yield to maturity a 13 percent b 12 percent c 11 percent d 10 percent 30 A bank buys bonds with a par value of $25 million for $24,040,000 The coupon rate is 10 percent, and the bonds pay annual payments The bonds mature in four years The bank wants to sell them in two years, and estimates the required rate of return in two years will be 8 percent What will the market value of the bonds be in two years a $24,113,418 b $24,667,230 c $25,000,000 d $25,891,632

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21. A bond with a ten percent coupon rate bond pays interest semi-annually. Par value is $1,000. The bond has three years to maturity. The

21. A bond with a ten percent coupon rate bond pays interest semi-annually. Par value is $1,000. The bond has three years to maturity. The investors' required rate of return is 12 percent. What is the present value of the bond?

a.	$1,021
b.	$1,000
c.	$981
d.	$951
e.	none of the above

22. A bond with a 12 percent quarterly coupon rate has a yield to maturity of 16 percent. The bond has a par value of $1,000 and matures in 20 years. Based on this information, a fair price of this bond is $____.

a.	1,302
b.	763
c.	761
d.	1,299

23. From the perspective of investing institutions, the most attractive foreign bonds offer a ____ and are denominated in a currency that ____ over the investment horizon.

a.	high yield; appreciates
b.	high yield; remains stable
c.	low yield; appreciates
d.	low yield; depreciates

24. The value of ____-risk securities will be relatively ____.

a.	high; high
b.	high; low
c.	low; low
d.	none of the above

25. The larger the investor's ____ relative to the ____, the larger the ____ of a bond with a particular par value.

a.	discount rate; required rate of return; discount
b.	required rate of return; discount rate; discount
c.	required rate of return; discount rate; premium
d.	none of the above

. 26. A(n) ____ in the expected level of inflation results in ____ pressure on bond prices.

a.	increase; upward
b.	increase; downward
c.	decrease; downward
d.	none of the above

27. Lisa can purchase bonds with 15 years until maturity, a par value of $1,000, and a 9 percent annualized coupon rate for $1,100. Lisa's yield to maturity is ____ percent.

a.	9.33
b.	7.84
c.	9.00
d.	none of the above

28. An insurance company purchases corporate bonds in the secondary market with six years to maturity. Total par value is $55 million. The coupon rate is 11 percent, with annual interest payments. If the expected required rate of return in 4 years is 9 percent, what will the market value of the bonds be then?

a.	$52,115,093
b.	$55,341,216
c.	$55,000,000
d.	$56,935,022

29. A $1,000 par bond with five years to maturity is currently priced at $892. Annual interest payments are $90. What is the yield to maturity?

a.	13 percent
b.	12 percent
c.	11 percent
d.	10 percent

30. A bank buys bonds with a par value of $25 million for $24,040,000. The coupon rate is 10 percent, and the bonds pay annual payments. The bonds mature in four years. The bank wants to sell them in two years, and estimates the required rate of return in two years will be 8 percent. What will the market value of the bonds be in two years?