26) A coupon bond that pays interest of $60 annually has a par value of $1,000, matures in 5 years, and is selling today at an $84.52 discount from par value. The yield to maturity on this bond is A) 7.23% B) 6% C) 8.12% D) 9.45% 27) A Treasury bond due maturity) in 3 years has a yield of 5.7% and a Treasury bond due in 5 years has a yield of 6.7%. A bond issued by Facebook, Inc. due in 3 years has a yield of 7.9%; a bond issued by Microsoft, Inc, due in 3 years has a yield of 7.2%. What are the spreads (default risk premiums) on the bonds issued by Facebook and Microsoft? A) Facebook 1.2% and Microsoft 0.5% B) Facebook 2.2% and Microsoft 1.5% C) Facebook 2.2% and Microsoft 1.5% D) Facebook 0.2% and Microsoft 2.5% 28) T-Mobile, Inc. has issued a 10 year callible bond with a coupon rate of 7.50%. The bond is rated BB+ by Standard & Poor's (S&P). This credit rating indicates that the bond is A) investment grade B) quality grade C) speculative grade (or junk bond) D) none of the above 29) All else equal, bond price volatility is greater for A) higher coupon rates B) lower coupon rates C) N/A as all bonds have identical duration D) lower default risk 30) Duration is a concept that is useful in assessing a bond's A) credit risk B) liquidity risk C) price volatility D) default risk MacBook Air