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Describe the relationships that exist between the coupon rate, the yield to maturity, and the current yield for both a discount bond, a premium bond

  1. Describe the relationships that exist between the coupon rate, the yield to maturity, and the current yield for both a discount bond, a premium bond and a par bond.

  2. Champions and Winners Limited issued 20-year bonds a year ago at a coupon rate of 11.4 percent. The bonds make semi-annual payments. The yield-to-maturity on these bonds is 9.2 percent. What is the current bond price?

  3. HKABC Limited. has bonds on the market with 13 years to maturity, a yield-to-maturity of 9.2 percent, and a current price of $895.09. The bonds make semi-annual payments. What is the coupon rate?

  4. Suppose the real rate is 1.5% and the inflation rate is 0.8%. What rate would you expect to see on a Treasury bill?

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