4a) What happens to the Present Value (PV) of a fixed amount if the length of time grows from 5 to 10 years, but the rate stays the same?

Select one:

The PV increases

The PV decreases

The PV doesn't change

The PV goes to infinity

4b) The last bond issued by the Borg Face Plate Manufacturing Company was a series of $1,000 face value bonds which paid an 8.5% coupon. These bonds have a maturity date 5 years from today and make semi-annual payments. They currently have a yield to maturity of 12.34%. What will happen to the price of the bond if the market interest rate suddenly decreases to 7.41%?

Select one:

The bond price will remain unchanged.

The bond price will decrease and trade at a discount.

The bond price will increase and trade at a premium.

The bond price will decrease but still trade at a premium.

The bond price will increase but still trade at a discount.

4c) A new issue of bonds from Chegg offer a 15.20% coupon, payable semiannually. The bonds mature in 9 years and have a $1,000 face value. Currently the bonds sell for $1411.66. What is the yield to maturity for these bonds?

Select one:

a. 10.63 %

b. 11.33 %

c. 6.52 %

d. 8.55 %

e. 3.97 %