Finance

9. A 20 year, $1,000 par value bond has a 6.5% coupon rate. Coupons are paid annually. What is the yield to maturity on the bond if the price is $1,057 ? a. 6.00% b. 6.35% c. 6.50% d. 6.63% 10. A 30 year, $1,000 par value bond has a 7.0% coupon rate. Coupons are paid semi-annually. What is the price of the bond if the yield to maturity on the bond is 6.0% ? a. $1,108.37 b. $1,117.81 c. $1,127.40 d. $1,138.38 11. A 18 year, $1,000 par value bond has a 5.0% coupon rate. Coupons are paid annually. The yield to maturity on the bond is 6.3%. If an investor purchases this bond and sells it one year later, when the yield to maturity is 5.9%, what is the rate of return return earned by the investor? a. 5.9% b. 6.3% c. 10.75% d. 11.42% 12. A 10 year, $1,000 par value bond has a 5.0% coupon rate. Coupons are paid annually. The bond is rated AAA by S\&P. It is downgraded to AA. The YTM on AAA bond is 5.2%. The YTM on AA bonds is 5.5%. How much does the bond price change? a. Drops $22.39 b. Drops $33.78 c. Increases $22.39 d. Increases $33.78