Calculate the price of a zero coupon bond that matures in 10 years if the market interest rate is 7 percent. (Assume semi- annual compounding and $1,000 par value.) $940.00 $1.000.00 $502.57 $553.68 Which of the following terms is the chance that the bond issuer will not be able to make timely payments? Credit risk Interest rate risk Liquidity of interest rate risk Term structure of interest rates Determine the interest payment for the following three bonds: 5.55 percent coupon corporate bond (paid semi-annually). 6.45 percent coupon Treasury note, and a corporate zero-coupon bond maturing in 10 years. Assume a $1,000 par value.) $27.75, $32.25, 50, respectively $55.00 $64.50, $100, respectively $5.50. $6.45, 50, respectively $27.50 $64.50, 50, respectively The Morningstar Corp's reports that the current rate on 10-year Treasury bonds is 7.25 percent, on 20-year Treasury bonds is 7.35 percent, and on a 20-year corporate bond is 8.70 percent. Assume that the maturity risk premium is zero. If the default risk premium and the liquidity risk premium on a 10-year corporate bond is the same as that on the 20-year corporate bond, what is the current rate on a 10-year corporate bond? 7.63% 9.35% 8.60% 8.98% A corporation's 10-year bonds have an equilibrium rate of return of 7 percent. For all securities, the inflation risk premium is 1.15 percent and the real interest rate is 3.0 percent. The security's liquidity risk premium is 0.15 percent and maturity risk premium is 0.70 percent. The security has no special covenants. What is the bond's default risk premium? 1.65 % 2.00% 9.35% 5.35 %