Bonds issued by the Coleman Manufacturing Company have a par value of $1,000, which of course is also the amount of principal to be paid at maturity. The bonds are currently selling for $940. They have 10 years remaining to maturity. The annual interest payment is 10 percent ($100).

Compute the yield to maturity. (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

2) Refer to Table 10-1, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) decline from 14 percent to 10 percent.

a.	What is the bond price at 14 percent?

Bond price

$

b.	What is the bond price at 10 percent?

Bond price

$

c.	What would be your percentage return on investment if you bought when rates were 14 percent and sold when rates were 10 percent? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Enter the value as a positive amount.)

Return on investment %

3)

Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 11 percent annual interest. The current yield to maturity on such bonds in the market is 10 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Compute the price of the bonds for these maturity dates: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.)

	Bond Price
a. 40 years	$
b. 25 years	$
c. 3 years	$