A Ford Motor Co. coupon bond has a coupon rate of 6.95%, and pays annual coupons. The next coupon is due tomorrow and the bond matures 37 years from tomorrow. The yield on the bond issue is

6.35%. At what price should this bond tradetoday, assuming a face value of $1,000?

If the nominal rate of interest is 13.4% and the real rate of interest is 7.51%, what is the expected rate ofinflation?

What is the percentage change in price for a zero coupon bond if the yield changes from

6.5% to 5.5%? The bond has a face value of $1,000 and it matures in 10 years. Use the price determined from the firstyield, 6.5%, as the base in the percentage calculation.

Assume that Microsoft bonds have just left the printer and have a stated coupon of$100 (a coupon rate of10%) and a yieldtomaturity of15%. The bonds mature in three years and the next coupon is due in one year. What is the fair price for the bondtoday?

A zero coupon bond has a face value of $1,000 and matures in 6 years. Investors requirea(n) 6.9% Annual return on these bonds. What should be the selling price of thebond?

Assume that Microsoft bonds have just left the printer and have a stated coupon of$100 (a coupon rate of10%) and a yieldtomaturity of15%. The bonds mature in three years and the next coupon is due in one year. What is the fair price for the bondtoday?

A $ 918.71

B $ 1000

C $ 855.84

D $ 956.52