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Name Cirele either Lecture 404 (9 am) or Lecture 405(1 pm) Time of your discussion with Siyuan Fan or Alex Probst Bus Adm 350 Principles of Finance Multiple Choice: Answer in pencil on the scantron sheets. Select the best response Chapter 6: Interest rates and bond valuation (8 questions) 1. Ragnarock has 6% coupon Richard D. Marcus bonds on the market that have 7 years left to maturity. The face value of Mockingjay bonds is $1,000. The bonds make annual payments. Ifthe YTM on these bonds is 5.4%, what is the current market price of Ragnarock bonds a. $1,078.23 b. S1,101.76 c$1,034.22 d $1,094.33 2. Thor Industries makes RVs. They sell bonds. Let's call them Thor bonds. (No points are gihen if you have a hunch what movie Dick saw this weekend.) When a Thor bond with a face value semiannualpayments of $30 for 8 years sells in the market for $1.024, thi Thor bond is called a: a. par bond b. premium bond. c. discount bond d. zero coupon bond 3 Which of the following is NOT TRUE? a... floating rate bonds pay an interest that adjusts up and down based on some index measure. b. interest only bonds pay c. convertible bonds are bonds that can be exchanged for shares of common stock d. zero coupon bonds pay no interest but are sold at a deep discount to the face value. When the term structure of interests is downward sloping, which of the following is NOT TRUE? a. This is called an inverted yield curve. b.. The 10 year rate of interest is below the 5 year rate of interest. 4. This is called a normal yield curve. Downward sloping yield curves often precede a recession. The current price of a WE Energy bond is $1,003. It has a face value of $1,000. This bond pays $40 every year in interest. The yield to maturity is 3.9%. This WE Energy bond matures in about years. a. 3.25 years b. 2.75 years c. 3 years d. 2.5 years