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oo0 AT&T 8:41 AM 7) $1000 Face Value 8% Coupon Bond (Paid Semi-Annually) with a maturity of 7 years. The bond is selling for $1075

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oo0 AT&T 8:41 AM 7) $1000 Face Value 8% Coupon Bond (Paid Semi-Annually) with a maturity of 7 years. The bond is selling for $1075 and is callable in 3 years at a call premium of $1060. What is the yield to maturity? What is the yield to call? 8) $1000 Face Value 6% Coupon Bond (Paid Annually) with a maturity of 5 years. The bond is selling for $959. What is the Yield to Maturity? What is the Current Yield? What is the expected price of the bond in one year if the required rate of return on the bond remains constant? 9) $1000 Face Value 5% Coupon Bond (paid annually) with a maturity of 6 years. The bond is selling for $900 today. (The YTM today is 7.1 %) a) What is the price of the bond in 2 years (the bond has 4 years left to maturity) if the required rate of return investors demand is still 7.1% (the YTM is still 7.1% in two years) b) What is the price of the bond in 2 years (the bond has 4 years left to maturity) if the required rate of return investors demand has dropped to 6.1% (the YTM is now 6.1% in two years). What is your actual rate of return if you sell the bond in 2 years and the required rate of return has dropped to 6.1 %

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