BOND MARKET AND BOND VALUATION

1. What is the price of a $100 face value , 4year, zero coupon bond if the market rate of interest of such risk free zero coupon bonds is 5.95%

2. Consider a ten year bond with a face value of $1000 that has a coupon rate of 5.5%, with semiannual payments.

a. What is the coupon payment for this bond? b. Draw the cash flows for the bond on a timeline.

3.. The yield to maturity (rate of interest) of a $1000 bond with a 7% coupon rate, semiannual coupons, and two years to maturity is 7.6% APR , compounded semiannually. What must be its price ?

4.. You have purchased a 10% coupon bond for $1040. What will happen to the bond s price if the market interest rates rise and why?

5. What is the yield to maturity (YTM) of a 5 year zero coupon, $100 face value bond which is currently priced at $74.55?