6. Look at the information in the previous question. What is the modified duration of the bond with the highest duration? (To 2 decimal places).

7 A twenty-year corporate bond matures on June 1, 2040, has a coupon of 5.25%, and is currently quoted at 109.58. The no-call provision expires in 4.5 years after issue date, with a 5% call premium. If you settled the trade today, what is the bonds yield-to-call?

8. The $1,000 face value bond has a coupon rate of 4.25%, with interest paid semi-annually, and matures in 7 years. If the bond is priced to yield 3.36%, what is the bond's value today?

9. A bond has a current price of $5,125, a maturity value of $5,000, and matures in 8 years. If interest is paid semi-annually and the bond is priced to yield 4.62%, what is the bond's coupon rate?

10. You are searching for tax-free income because your marginal tax rate is 42.6% (so sorry: you live in New Jersey). A twenty-year muni bond for the City of Trenton School District has a coupon of 6.27%, maturing on April 1, 2034 (non-callable). It is currently priced at 103.217. If you bought it today, what is its tax-equivalent yield?

11. As compared to non-convertible bonds, yield on convertible bond is

a. relatively lower.

b. relatively higher.

c. about the same, depending on its credit rating.

d. issued at discount.

e. issued at premium.

12. Convertible bonds are sometimes considered hybrid bonds because they have properties of

a. debt.

b. common equity.

c. both debt and equity

d. ordinate and subordinated

e. None of the above no such thing as hybrid bonds.

13. ________________ refers to any sudden and tangible (negative) change in a borrower's credit standing or decline in credit rating can bring into question the borrower's ability to repay its debt and is the defining trigger in a credit derivative contract, or credit default swap.

a. Bond default

b. Credit event

c. Counterparty default

d. Dealer default