Question
Disney's semiannual, AA rated 15 year bond has a coupon rate of 8% and a par value of $1000. If the current price for the
Disney's semiannual, AA rated 15 year bond has a coupon rate of 8% and a par value of $1000. If the current price for the bond is $900, what is its current yield?
| 4.4% | |
| 8.9% | |
| 8% | |
| 17.8% |
A broker prices a bond for an investor at $1020. The semiannual bond has a coupon of 6.55% and 8 years until maturity. Market rates are 6.25%. Which of the following is TRUE?
| the investor can expect to earn 6.23% and should buy the bond from the broker | |
| the investor can expect to earn 6.23% and should not buy the bond from the broker | |
| the investor can expect to earn 5.93% and should buy the bond from the broker | |
| the investor can expect to earn 5.93% and should not buy the bond from the broker |
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