5.What is the price of a bond with a 4% coupon rate paid annually, a face value of $1,000, and 10 years to maturity if prevailing interest rates on similar bonds is 8%?

A.		$789.24
B.		$584.32
C.		$731.60
D.		$1000

6.What is the current yield of a bond with a 4% coupon rate paid annually, a face value of $1,000, and 10 years to maturity if prevailing interest rates on similar bonds is 8%?

	A.	5.1%
	B.	7.3%
	C.	5.5%
	D.	6.2%

7.A bond with a 4% coupon rate paid annually, a face value of $1,000, and 10 years to maturity when prevailing interest rates on similar bonds is 8% is said to be trading at a

	A.	premium.
	B.	discount.
	C.	face value.
	D.	spread.

8.When an investor purchases a bond, he or she

A.		receives accrued interest
B.		pays accrued interest
C.		receives accrued dividends
D.		pays accrued dividends