5.10 Chapter 5 HW - Problem Mastery

3. What happens to the price of a three-year annual coupon paying bond with an 8% coupon when interest rates change from 8% to 6.29%? Answer in dollar terms to the nearest decimals without the $ sign. Use a "-" sign to denote a price decrease. Do not use a "+" sign.

5. How much should you pay for a $1,000 bond with 10% coupon, annual payments, and five years to maturity if the interest rate is 12%? 7. What is the rate of return for an investor who pays $1,054.47 for a three-year bond with a 7% coupon and sells the bond one year later for $1,037.19? Answer in percentage terms to 2 decimals and without the % sign. 8. What is the current yield of a bond with a 6% coupon, four years until maturity, and a price of $916.48? In % terms to 2 decimal places without the % sign. 9. A corporate bond with a 6% coupon (paid semiannually) has a yield to maturity of 7.5%. The bond matures in 20 years but is callable at $1050 in ten years. The maturity value is par. Calculate the bonds yield to call. % terms w/o $ sign. (HINT: Find the current price and then solve for YTC.) 10. Cornerstone Industries has a bond outstanding that has a 5% coupon rate, $1,000 face value, and a market price of $897.34. If the bond matures in 5 years and interest is paid on a semi-annual basis, what is the yield to maturity on the bond? % format to 2 decimal places - no % sign