An investment offers a 13.5 percent total return over the coming year. Bill Bernanke thinks the total real return on this investment will be only 6.0 percent. What does Bill believe the inflation rate will be over the next year? Multiple Choice 9.20% 8.14% 7.08% 4.95% -6.61% Prey 1 of 2 Ashes Divide Corporation has bonds on the market with 17 years to maturity, a YTM of 10.0 percent, and a current price of $1,256.50. The bonds make semiannual payments. What must the coupon rate be on these bonds? (Do not round your intermediate calculations.) Multiple Choice 10.48% 13.17% 26.40% 13.27% 21.01% Kiss the Sky Enterprises has bonds on the market making annual payments, with 9 years to maturity, and selling for $880. At this price, the bonds yield 8.5 percent. What must the coupon rate be on the bonds? Multiple Choice 6.54% 13.08% 6.64% 743% 8.50% Staind, Inc., has 8 percent coupon bonds on the market that have 13 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 11 percent, what is the current bond price? Multiple Choice $797.50 $837.38 $1,030.00 $1.241.11 $757.63 Ngata Corp. issued 19-year bonds 2 years ago at a coupon rate of 9.6 percent. The bonds make semiannual payments. If these bonds currently sell for 107 percent of par value, what is the YTM? Multiple Choice 4.40% 7.92% 10.56% 8.80% 9.68% P7-16 Interest Rate Risk (LO2) Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 5 years to maturity, whereas Bond Dave has 17 years to maturity. (Do not round your intermediate calculations.) Requirement 1: (a) If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Sam? (Click to select) : (b)lf interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Dave? (Click to select): Requirement 2: (a)lf rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Sam be then? (Click to select) (b)if rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Dave be then? (Click to select) Saved Grohl Co. issued 14-year bonds a year ago at a coupon rate of 9 percent. The bonds make semiannual payments. If the YTM on these bonds is 9 percent, what is the current bond price? Multiple Choice $1,000.00 $651.62 $1,010.00 $1,005.00 $1,685.60 Saved Ackerman Co. has 7 percent coupon bonds on the market with six years left to maturity. The bonds make annual payments. If the bond currently sells for $862.23, what is its YTM? Assume a par value of $1,000. Multiple Choice 3.96% 10.18% 8.90% 5.96% 4.97%
