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I need help with a few problems for a Corporate Fiance class. Please show work. Question 1 (1.5 points) Suppose the risk-free real rate is
I need help with a few problems for a Corporate Fiance class. Please show work.
Question 1 (1.5 points) Suppose the risk-free real rate is 3.5 percent and the inflation rate is 3.3 percent. You would expect to see a rate of ______ percent on a Treasury bill. Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16)) Your Answer: Question 1 options: Answer Save Question 2 (1.5 points) Blue Jazz, Inc., has 7 percent coupon bonds on the market that have 17 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 13.2 percent, the current price of the bond $______. Round it two decimial places, and do not include the $ sign, e.g., 935.67. Your Answer: Question 2 options: Answer Save Question 3 (2 points) Consider a 24-year bond with 7 percent annual coupon payments. The market rate (YTM) is 5.9 percent for this bond. The current yield of the bond is _______ percent. Answer it in percentage without the % sign, and round it to two decimal place, e.g., 5.69. Your Answer: Question 3 options: Answer Save Question 4 (1.5 points) Question 4 options: Suppose you have just bought a 16-year, 8% semiannual coupon bond. Your purchasing price of the bond implies that the current YTM is 7%. Assuming you keep this bond till its maturity, the number of coupon payments during the 16 year period is ; the dollar amount of each coupon payment is $ (no decimal places without the $ sign); the dollar amount that you will receive at maturity is $ (no decimal places, without the $ sign). Save Question 5 (1 point) Mary wants to invest her recent bonus in an 12-year, 8 percent coupon bond that pays semiannual coupon payments. The bonds are selling at $1,043.24 today. If she buys this bond and holds it to maturity, what would be her yield-to-maturity? Question 5 options: 11.08% 10.49% 5.44% 7.45% 9.68% Save Question 6 (1.5 points) Sea Masters Co. issued $1000 par value bonds with a 8 percent coupon. The bond pays interest semiannually and has 12 years remaining to its maturity date. If the market demands 7.0 percent required rate on the bond, what is the price of the bond? Round it two decimial places, and do not include the $ sign, e.g., 935.67. Your Answer: Question 6 options: Answer Save Question 7 (1 point) Suppose you have just bought a 10-year, 6% semiannual coupon bond with $1,000 par value. Your purchasing price of the bond implies that the current YTM is 7%. Select all that are true. Question 7 options: The coupon rate will gradually increase till it becomes the same as the YTM. Your purchasing price would have been lower than the par value. You will receive a $30 coupon payment every six month. You would earn 6% rate of return if you hold this bond until the maturity. The cash flows associated with the bond are an ordinary annuity for the 10 year period with a $1,000 lump sum at the maturity. SaveStep by Step Solution
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