Bonds and their Valuation

Issued at a Premium 5. A 5-year bond with 10% coupon rate and $1,000 face value is selling for $1,054.30. Calculate the yield to maturity on the bond assuming annual interest payments. A. 10.53% C. 10% B. 8.62% D. None of the above B 8 lvl 6. Mugwump Industries has issued a bond which has a $1,000 par value and a 15 percent annual coupon interest rate. The bond will mature in ten years and currently sells for $1,250. Using the approximation formula to calculate the yield to maturity (YTM) of this bond results in a YTM of A. 11.11 percent. C. 27.78 percent. B. 15.00 percent. D. 42.22 percent. |Gitman Present Value of Face Value 7. In calculating the total value of a bond. how much does the $1,000 to be received upon a bond's maturity in 4 years add to the bond's price if the discount rate is 6%? A. $207.91 C. $762.90 B. $747.26 D. $792.09 Gleim Annual interest payment 8. A 5-year treasury bond with a compound rate of 8% has a face value of $1000. What is the annual interest payment? A. $80 C. $100 B. $40 D. None of the above B 8 M