(A).

What is the most we should pay for a bond with a par value of $1000, coupon rate of 4.3% paid semi-annually, and a remaining life of 20 years? The bond is rated BBB, with a yield to maturity of 5.3%. (Round your answer to the nearest penny.)

Answer:

(B).

Compute the current yield on a bond with a yield to maturity of 8.3%, a par value of $1000, a coupon rate of 6.1% paid semi-annually, a remaining life of 29 years? (Round to 100th of a percent and enter as a percentage, e.g. 12.34% as 12.34 and state as an annual rate.)

Answer:

(C).

Your business manager forwards the following information to you. Your businesses earned a real rate of return of 5.4% last year and inflation for the same period was 3.9%. What was your nominal rate of return? (Note: nominal rates of return can be positive or negative.) (Use the exact method rather than the approximation method here.) (Round to 100th of a percent and enter as a percentage, e.g. 12.34% as 12.34.)

Answer: