lt, nnd pri ee year, is priced to yeld , 7. A$1,000 par, 8% Treasury bond maturing in a $974.21 b $813.50 e $927.50 d. $1,02664 8. An 8 year payment corporate bond has a market price of $900. Its coupon rate is 8% and yield to maturity is 10%. By how much is the bond mispriced? Hint-calculate price first A) $0.00 B) Overpriced by $8.38 C) Underpriced by 58.38 D) Overpriced by $6.70 E) Underpriced by $6.70 9. The Fed's primary tools of monetary policy include all the following except a changing the discount rate. b. open market operations. d changes in the Federal Funds rate. 10. If a debt security's coupon rate equals the current market interest rate on comparable securities, the security's market price will be a. at premium above par b. at a discount under par c. at par d. indeterminate without more information about the security e. none of the above 11. Negative realized real rates of interest are associated with periods where inflation forecasts significantly underestimate inflation. nominal interest rates were too high relative to actual inflation. prior inflation forecasts overestimated inflation. bond prices were priced too low relative to actual inflation. b. 12. Two factors that affect interest rate risk are a. default risk and reinvestment risk. b. liquidity risk and reinvestment risk. c. price risk and political risk. d. price risk and reinvestment risk