Dale 1. A counon bond A coupon bond that pays interest semi-annually has a par value of $1,000, matures in 5 years, and has a yield to maturity of 10 percent. What is the value of the bond today if the coupon rate is 10 percent? A) $1,144.31. B) $1000. C) $956.71. D) $922.78. 2. What is the current yield for a two-year 2.5 percent semi-annual coupon bond whose price is $93.19 (face value is $100)? A) 5.37%. B) 2.68% C) 4.94% D) 5.00%. 3. A bond investor buys the following bond on November 15. 2010 (assuming semi-annual compounding). If the bondholder holds this bond until maturity, which of the following statements is correct? Bond Price Face Amount 4.25s of 11/15/2012 99-14+ $10,000 A) The bondholder receives a coupon payment of $425 every May and November 15th through November 15, 2012. B) The bondholder receives $10,425 from the bond issuer at the maturity date of November 15, 2012 C) The bondholder pays $9.914.5 for this bond on November 15, 2010. D) The bondholder pays $9.945.3 for this bond on November 15, 2010. 4. A 6-month Treasury-bill has 123 days to maturity. Its price is quoted as 2.38% in Wall Street Journal. Which of the following is closest to the amount an investor needs to pay for this Treasury-bill per $1000 face value? A) 99.19 B) 991.87 C) 976.35 D) 987.15. 5. Assuming that the interest rates is 8 percent, what is the Macauley duration of a zero-coupon bond with 10 years remaining to maturity (assuming semi-annual compounding)? A) 9.62. B) 9.26. C) 10.00. D) Cannot be determined. Page 1