Question
NEED TO DOUBLE CHECK JUST PROVIDE ANSWER: QUESTION 6 For this and the next 2 questions. A 7-year, $1,000 par bond has an 8% annual
NEED TO DOUBLE CHECK JUST PROVIDE ANSWER:
QUESTION 6
For this and the next 2 questions. A 7-year, $1,000 par bond has an 8% annual coupon with a yield to maturity of 7.5%. Coupons are paid semiannually. This bond can be called in 2 years at a call price of $1,010. Calculate the price of this bond
A. $1,026.48 | ||
B. $1,026.85 | ||
C. $1,009.13 | ||
D. None of the above |
QUESTION 7
Assuming that the above bond will be called, calculate the yield to call.
A. 7.018% | ||
B. 7.218% | ||
C. 3.506% | ||
D. 7.012% | ||
E. 7.791% | ||
F. None of the above |
QUESTION 8
For the above bond, calculate the CURRENT YIELD.
A. 7.018% | ||
B. 7.218% | ||
C. 3.506% | ||
D. 7.012% | ||
E. 7.791% | ||
F. None of the above |
QUESTION 9
A $1,000 par bond with a coupon rate of 5% is currently selling for $915. This bond matures in 4 years. Suppose that this bond's coupons can be reinvested at 3% per year. Calculate the realized compound yield (RCY). Assume annual interest payments.
A. 7.018% | ||
B. 7.218% | ||
C. 3.506% | ||
D. 7.012% | ||
E. 7.791% | ||
F. None of the above |
QUESTION 10
The realized compound yield on a coupon-paying bond would always be equal to the bond's yield to maturity if
A. the coupon rate is equal to yield to maturity at the time a bond is issued | ||
B. the bond is issued at par | ||
C. the bond is issued at par and its coupons are reinvested at the coupon rate | ||
D. None of the above |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started