________ 3. A bond has a face value of $1,000, a market price of $987, and pays $37.50 in interest every six months.

What is the coupon rate?

a. 3.75 percent b. 4.50 percent c. 6.38 percent d. 7.50 percent

________ 4. A 9 percent, $1,000 bond matures in 16 years, pays interest semi-annually, and has a yield-to-maturity of

9.68 percent. What is the current market price?

a. $938.47 b. $945.23 c. $1,028.60 d. $1,108.19