Bond analysis (#13-#18) In order to finance a $1 million investment project, your company is planning to issue a bond with $1,000 of par which promises $80 of yearly interest over 3 years. Question 13 (0.5 points) Choose one closest to the coupon rate. 5% 6% 7% 8% 9% Question 14(1.5 points) Choose one closest to the current bond price if market participants require 11% of return on the bond. Choose one closest to the current bond price if market participants require 11% of return on the bond. > $925.00 5 6 $950.00 8 9 1 $975.00 11 12 $1,000.00 15 $1,025.00 17 18 Question 15 (0.5 points) Choose one closest to the current yield. 30 21 7% 24 7.5% 8% Page 1 question 10 (0.5 points) The coupon rate is: 1 higher than the yield to maturity. equal to the yield to maturity. 8 lower than yield to maturity. 10 continuously changing until maturity 11 12 13 15 Question 17 (0.5 points) Bond price is: 16 17 18 higher than the face value. 19 20 21 equal to the face value. lower than the face value. 23 24 Question 18 (0.5 points) This bond is called: Time Limit: 1:20:00 Time Left:0:48:06 Zeynab Zlya: Attempt 1 Page 1 1 2 3 Question 18 (0.5 points) This bond is called 5 a par bond. O a discount bond a premium bond. 11 12 a pure discount bond. 14 15 an amortized bond 18 20 21 Question 19 (2 points) One year has passed since Fairborn Co. issued bonds with $1,000 of par which pays 12% of coupons for 20 years on semiannual basis. Fairborn Co's bonds have a deferred call provision with 5 years of call-protection period. You expect Fairborn will redeem its bond immediately after the call protection period. Fairborn's bonds are callable with 10% of call premium. The bonds are currently selling for $1,333.03. Choose one closest to the yield to call. 23 24