A bond has a 15-year maturity, an 8% annual coupon, and a $1,000 par value. The required rate of return on the bond is 8%, given its risk, maturity, liquidity, and other rates in the economy. What is a fair value for the bond, i.e., its market price?

Suppose you are offered a 14-year, 8% annual coupon, $1,000 par value bond at a price of $1,422.52. What is the bond's YTM?

Suppose you purchase a 15-year, 8% annual coupon, $1,000 par value bond, but the bond originally could be called after 10 years at a call price of $1,080. One year later, interest rates have fallen from 8% to 4% causing the value of the bond to rise to $1,422.52. What is the bond's YTC? (Note, this is the same bond as the previous question except it can be called 9 years from today.)

What is the current yield on a $1,000 par value, 8% annual coupon bond that is currently selling for $981.60?

What is the price of a 15-year, 8% semiannual coupon, $1,000 par value bond if the nominal YTM is 4%?

The Henderson Companys bonds currently sell for $1,275. They pay a $120 annual coupon, have a 20-year maturity, and a par value of $1,000, but they can be called in 5 years at $1,120. What are their YTM and their YTC?

Last year a firm issued 20-year, 8% annual coupon bonds at a par value of $1,000. Suppose that one year later the going market interest rate drops to 6%. What is the new price of the bonds assuming that they now have 19 years to maturity?