5. (Yield to maturity)A bond's market price is $925. It has a $1,000 par value, will mature in 6 years, and has a coupon interest rate of 11 percent annual interest, but makes its interest payments semiannually. What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 12 years? What if it matures in 3 years?

a.The bond's yield to maturity if it matures in 6 years is

___nothing%.

(Round to two decimal places.)

6. Related to Checkpoint 9.2)(Yield to maturity)The Saleemi Corporation's

$1,000 bonds pay 11 percent interest annually and have 14 years until maturity. You can purchase the bond for $1,095.

a.What is the yield to maturity on this bond?

b.Should you purchase the bond if the yield to maturity on a comparable-risk bond is 11 percent?

a.The yield to maturity on the Saleemi bonds is

____nothing%.

(Round to two decimal places.)

7. (Related to Checkpoint 9.2 and Checkpoint 9.3)(Bond valuation relationships)The 18-year,

$1,000 par value bonds of Waco Industries pay 8 percent interest annually. The market price of the bond is $955, and the market's required yield to maturity on a comparable-risk bond is 10 percent.

a.Compute the bond's yield to maturity.

b.Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond.

c.Should you purchase the bond?

a.What is your yield to maturity on the Waco bonds given the current market price of the bonds?

____nothing%

(Round to two decimal places.)