8. Thirteen years ago a firm issued $1,000 par value bonds with a 5% annual coupon rate and a term to maturity of 20 years. Market interest rates have decreased since then and similar bonds today would carry an annual coupon rate of 4%. What would these bonds sell for today if they made (a) annual coupon payments; and (b) semiannual coupon payments?

11. If the annual coupon bond in #8 above is selling for $1,150, according to the approximate YTM formula, what is its annual YTM?

12.True or False: The YTM in #11 above is the precise YTM on that bond?

13. How does the precise YTM compare to the approximate YTM in #11?