Bonds in denominations of $100 000 redeemable at 104 are offered for sale. If the bonds mature in ten years and six months and the coupon rate is 5.5% payable quarterly, what is the market price of the bonds to yield 7.2% compounded quarterly? (Note: In this question, the bond is redeemed at a higher-than-par value, meaning if your par value was $100, you would receive $104 on redemption.)

a. $90,500

b. $125,468.89

c. $100,465.89

d. $89,440.89

In bond valuation, the stream of coupon payments is always treated as :

a. An annuity due under all circumstances

b. a value that is linked only to the discounting factor

c. a fluctuating payment

d. an annuity

Bond prices and market rates of interest always have :

a. a direct relationship

b. an inverse relationship

c. a reciprocal relationship

d. no direct relationship

A $150 000 bond bearing interest at 6% payable semi-annually is bought eight years before maturity to yield 4.5% compounded annually. If the bond is redeemable at par, what is the purchase price?

a. $168,000.88

b. $165,501.23

c. $168,401.33

d. $145,253.33

In bond valuation models, the Yield-to-Maturity (YTM) is equivalent to :

a. an internal rate of return

b. the current yield

c. the coupon rate

d. the return of equity

A $25 000, 6% bond redeemable at par is purchased 11 years before maturity to yield 6.9% compounded semi-annually. If the bond interest is payable semi-annually, what is the purchase price of the bond?

a. $24000

b. $27,850

c. $23,285.32

d. $23,380

A $5000 bond that pays 6% semi-annually is redeemable at par in 14 years. Calculate the purchase price if it is sold to yield 8% compounded semi-annually. (Note: Purchase Price is synonymous with the value of the bond)

a. $4166.85

b. $4240.68

c. $4166.65

d.$ 4400.78

The current yield on a bond factors in the :

a. nominal value of the bond

b. market price of the bond

c. future value of the bond

d. coupon payment on the bond