Question
#6. Workman Software has 8.2 percent coupon bonds on the market with 6 years to maturity. The bonds make semiannual payments and currently sell for
#6. Workman Software has 8.2 percent coupon bonds on the market with 6 years to maturity. The bonds make semiannual payments and currently sell for 84.3 percent of par.
- What is the current yield on the bonds?
- 0.20%
- 10.71%
- 9.73%
- 10.21%
- The YTM?
- 11.93%
- 12.11%
- 8.70%
- 5.96%
- The effective annual yield?
- 0.10%
- 11.90%
- 12.90%
- 12.29%
#7. Weismann Co. issued 6-year bonds a year ago at a coupon rate of 10 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 7 percent, what is the current bond price?
- $1,295.08
- $784.24
- $1,124.75
- $1,084.93
- $1,134.75
#13. Gabriele Enterprises has bonds on the market making annual payments, with 18 years to maturity, a par value of $1,000, and selling for $930. At this price, the bonds yield 10 percent. What must the coupon rate be on the bonds?
- 9.15%
- 18.29%
- 9.83%
- 10.00%
- 9.25%
#17. Both Bond Sam and Bond Dave have 9 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 4 years to maturity, whereas Bond Dave has 16 years to maturity.
If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam?
- -6.31%
- -6.76%
- -6.33%
- 6.43%
If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Dave?
- 16.01%
- -17.51%
- -14.90%
- -14.88%
If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Sam be then?
- 6.85%
- -6.28%
- 6.43%
- 6.87%
If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Dave be then?
- 19.05%
- -14.85%
- 16.01%
- 19.07%
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