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1 Harrison Co. issued 15-year bonds one year ago at a coupon rate of 7.6 percent. The bonds make semiannual payments. If the YTM on these bonds is 5.3 percent, what is the current dollar price assuming a $1,000 par value? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current bond price $ ___________

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2 - Volbeat Corporation has bonds on the market with 19 years to maturity, a YTM of 11.1 percent, a par value of $1,000, and a current price of $937. The bonds make semiannual payments. What must the coupon rate be on the bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Coupon rate %

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3- An investment offers a total return of 11 percent over the coming year. Janet Jello thinks the total real return on this investment will be only 8.9 percent. What does Janet believe the inflation rate will be over the next year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Inflation rate %

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4- You find a zero coupon bond with a par value of $10,000 and 29 years to maturity. The yield to maturity on this bond is 5.1 percent. Assume semiannual compounding periods. What is the price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Price $ _______

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5-

Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 9 percent, a YTM of 7 percent, and has 15 years to maturity. Bond Y is a discount bond making semiannual payments. This bond has a coupon rate of 7 percent, a YTM of 9 percent, and also has 15 years to maturity. Assume the interest rates remain unchanged and both bonds have a par value of $1,000. What are the prices of these bonds today? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

	Price
Bond X	$
Bond Y	$

What do you expect the prices of these bonds to be in one year? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

	Price
Bond X	$
Bond Y	$

What do you expect the prices of these bonds to be in three years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

	Price
Bond X	$
Bond Y	$

What do you expect the prices of these bonds to be in eight years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

	Price
Bond X	$
Bond Y	$

What do you expect the prices of these bonds to be in 12 years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

	Price
Bond X	$
Bond Y	$

What do you expect the prices of these bonds to be in 15 years? (Do not round intermediate calculations.)

	Price
Bond X	$
Bond Y	$

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6- Both Bond Bill and Bond Ted have 9.4 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 5 years to maturity, whereas Bond Ted has 22 years to maturity. Both bonds have a par value of 1,000.

If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

	Percentage change in price
Bond Bill	%
Bond Ted	%

If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of these bonds? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

	Percentage change in price
Bond Bill	%
Bond Ted	%

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7- You find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2016. The bonds have a par value of $1,000.

Rate	Maturity Mo/Yr	Bid	Asked	Chg	Ask Yld
??	May 26	103.5488	103.5366	+.3041	6.039
5.324	May 31	104.4978	104.6435	+.4317	??
6.173	May 41	??	??	+.5431	4.071

In the above table, find the Treasury bond that matures in May 2041. What is the asked price of this bond in dollars? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Asked price $ If the bid-ask spread for this bond is .0538, what is the bid price in dollars? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Bid price $

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8- You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2016. The bonds have a par value of $2,000.

Company (Ticker)	Coupon	Maturity	Last Price	Last Yield	EST $ Vol (000s)
Xenon, Inc. (XIC)	6.200	Jan 15, 2028	94.263	??	57,370
Kenny Corp. (KCC)	7.200	Jan 15, 2027	??	5.30	48,949
Williams Co. (WICO)	??	Jan 15, 2034	94.815	7.00	43,810

What price would you expect to pay for the Kenny Corp. bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Price $ What is the bonds current yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Current yield %

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9- Bond P is a premium Bond with a coupon rate of 8.3 percent. Bond D is a discount Bond with a coupon rate of 4.3 percent. Both Bonds make annual payments, have a YTM of 6.3 percent, a par value of $1,000, and have eight years to maturity. What is the current yield for Bond P? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Current yield % What is the current yield for Bond D? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Current yield % If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond P? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Capital gains yield % If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond D? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Capital gains yield %

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10- The YTM on a bond is the interest rate you earn on your investment if interest rates dont change. If you actually sell the bond before it matures, your realized return is known as the holding period yield(HPY). a. Suppose that today you buy an annual coupon bond with a coupon rate of 8.3 percent for $890. The bond has 7 years to maturity and a par value of $1,000. What rate of return do you expect to earn on your investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Rate of return % Two years from now, the YTM on your bond has declined by 1 percent, and you decide to sell. b. What price will your bond sell for? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Price $ What is the HPY on your investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Holding period yield %