9. A 7.5% coupon, semiannual-pay, five-year bond has a yield to maturity of 6.80%. over the next year, if the bonds yield to maturity remains unchanged, its price will:

A. increase.

B. decrease.

C. remain unchanged.

D. Cannot be determined.

E. None of the above.

10. J&J Company's bonds mature in 10 years, have a par value of $1,000, and make an annual coupon interest payment of $75. The market requires an interest rate of 8% on these bonds. What is the bond's price?

A. $966.45

B. $925.62

C. $948.76

D. $972.48

E. None of the above.

11. Jack Long, CFA, is evaluating the retirement account of John Smith. Smith currently has $500,000 and will retire in 12 years. If Smith needs $2 million at retirements, the return required is closest to:

A. 11.0%

B. 10.0%

C. 12.25%.

D. 13.0%

E. None of the above.

12. Michelle is thinking about two different investments options each for 4 years and interest rate is 5% annually: Option A: Receive four end of year payments each of $3,000. Option B: Receive four payments of $2,000, $3,000, $5,000 and $2,000 for the first, second, third and fourth year respectively. Which option has the higher present value?

A. Option A

B. Option B

C. Both options have the same present value

D. Cannot be determined

E. None of the above.