1. Creamy Crisp's bonds have a coupon rate of 6.5%. Interest is paid quarterly and the bonds have a maturity of 8 years. The required rate of return for bonds in the same risk class is 7%. What is the price of the bonds?
2. Corner Donuts Inc. has a bond outstanding that has a 7.5% coupon rate and a market price of $880.84. If the bond matures in 7 years and interest is paid semiannually, what is the YTM?

3.

1. Bonds A and B are identical, including the risk class. The only difference between A and B is the coupon amount.

	Bond A	Bond B
Face value	$1,000	$1,000
Semiannual Coupon	$50	$35
Years to maturity	20	20
Price	$1,197.93	?

What is the YTM of Bond A?

What is the price of bond B?

4. A bond with a face value of $1,000 has annual coupon payments of $100. It was issued 10 years ago and has 7 years remaining to maturity. The current market price for the bond is $1,000. Which of the following is true: I. Its YTM is 10%. II. Bonds coupon rate is 10%. III. The bonds current yield is 10%.

5. Republic of Banana Inc. has a bond outstanding. This bond is selling in the market for $914.78, has a 9% coupon rate, and 4 years to maturity. Interest payments are made semiannually. What is the bonds YTM?

6. Riverhawk Corporation has a bond outstanding with a market price of $1,136.00. The bond has 3.5 years to maturity, pays interest semiannually, and has a yield to maturity of 9%. What is the bonds coupon rate?

7. Bonds X and Y are identical, including the risk class. The only difference between A and B is the coupon payment as shown below.

	Bond X	Bond Y
Face value	$1,000	$1,000
Annual Coupon Payment	$120	$130
Payment Frequency	Semiannual	Annual
Years to maturity	15	15
Price	$919.43	?

What is the YTM of Bond X?

What is the price of bond Y?

8. Lowell Fried Chicken's bonds have an 11% coupon rate, and pay interest quarterly. If the bonds have 10 years to maturity and the market required rate of return is 12%, what is the market price of these bonds?

9. What will be the percent change in the market price of these bonds if the market required rate of return drops from 12% to 10%?

10. Simla Company has a bond selling for $905. If it has 13 years to maturity, pays interest annually, and the YTM is 8.5 percent, what is the coupon rate?

11. Bending Inc. has a bond outstanding that makes semiannual coupon payments is selling at 105 percent of par. The coupon rate is 9 percent and the bond has 12 years to maturity. a. What is the bonds Current yield?

b. What is the bonds yield to maturity?

c. What is the bonds effective yield?

d. What is the bonds capital gains yield?

e. If the required return from the bond in question a, changes to 9.5%, what will the bond's market price?

f. What is the percent change in price if the required return from this bond is 9.5%?

g. If the required return from the bond in question a, changes to 7.5%, what will the bond's market price?

h. What is the percent change in price if the required return from this bond is 7.5%?