Choose the correct answers

1.A 4.25% coupon rate bondwith 5 years left to maturity has a par value of $1,000. What is thechange in the price of this bond if its yield to maturity rises from 3.75% to 4.75%? (A. $22.31 increase, B. $44.21 increase, C. $44.21 decrease D. 44.63 decrease)

2.The par value of a bond is less than its current price. Which one of the followingapplies to this bond?

(A.Yield to maturity is less than the coupon rate. B. Currently selling at par. C. Yield to maturity is greater than the coupon rate, D. Yield to maturity is equal to the coupon rate.

3.Acompany wants to raise $50,000,000. It plans to sell 15 year, $1,000par value, zero coupon bonds. The bonds will be priced to yield6.60%. What is the minimum number of bonds it must sell to raise the money it needs?

(A, 132,428 B. 50,000, C. 25,126 D. 130,415)

4.A firm has bonds making semi-annual payments, with 17 years to maturity, a par value of $1,000, and selling for $1,275.50. At this price, the bonds yieldto maturity is 5.83%. What is the annual coupon rate? (A7.71%, B.3.85%, C.10.50% D. 8.41%)

5. A firm has a bond issue with an annualcoupon rate of 6.75% that matures in12 years. The bonds have a par value of $1,000 and a market price of $935. What is the annual yield to maturity? (A.3.79% B. 7.58%, C. 5.93%, D.14.67%)