Multiple Choice.

1. Which of the following bonds is trading at par?

A) a bond with a $2,000 face value trading at $1,987

B) a bond with a $1,000 face value trading at $999

C) a bond with a $1,000 face value trading at $1,000

D) a bond with a $2,000 face value trading at $2,012

2. Which of the following bonds is trading at a premium?

A) a five-year bond with a $2,000 face value whose yield to maturity is 7.0% and coupon rate is 7.2% APR paid semiannually

B) a ten-year bond with a $4,000 face value whose yield to maturity is 6.0% and coupon rate is 5.9% APR paid semiannually

C) a 15-year bond with a $10,000 face value whose yield to maturity is 8.0% and coupon rate is 7.8% APR paid semiannually

D) a two-year bond with a $50,000 face value whose yield to maturity is 5.2% and coupon rate is 5.2% APR paid monthly

3. A company releases a five-year bond with a face value of $1000 and coupons paid semiannually. If market interest rates imply a YTM of 8%, which of the following coupon rates will cause the bond to be issued at a premium?

A) 7%

B) 6%

C) 8%

D) 10%