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please help with this assignment. as the instructor I have does not know how to explain Q U E S T I O N 1
please help with this assignment.
as the instructor I have does not know how to explain
Q U E S T I O N 1 A premium bond is a bond that: is selling for less than par value. has a par value which exceeds the face value. has a market price which exceeds the face value. is callable within 12 months or less. has a face value in excess of $1,000. QUESTION 2 A firm's bonds have maturity of 10 years with a $1000 face value, an 8% semi-annual coupon, are callable in 5 years, at $1,050, and currently sells at a price of $1,100. What is the yield to call (YTC)? QUESTION 3 1. Assume that you wish to purchase a 19-year bond that has a maturity value of $1,000 and a coupon interest rate of 11%, paid semiannually. If you require a 6.13% rate of return on this investment (YTM), what is the maximum price that you should be willing to pay for this bond? That is, solve for PV. QUESTION 4 1. ABC's bonds have a 9.5 percent coupon and pay interest semi-annually. Currently, the bonds are quoted at 106.315 percent of par value. The bonds mature in 8 years. What is the yield to maturity? QUESTION 5 1. The 8 percent coupon bonds of the Peterson Co. are selling for 98 percent of par value. The bonds mature in 5 years and pay interest semi-annually. These bonds have a yield to maturity of _____ percent. QUESTION 6 1. Stealers Wheel Software has 9.36% coupon bonds on the market with nine years to maturity. The bonds make semi-annual payments and currently sell for 92.62% of par. What is the current yield? QUESTION 7 1. ABC has issued a bond with the following characteristics: Par: $1,000; Time to maturity: 19 years; Coupon rate: 8%; Assume annual coupon payments. Calculate the price of this bond if the YTM is 10.29% QUESTION 8 1. ABC has issued a bond with the following characteristics: Par: $1,000; Time to maturity: 13 years; Coupon rate: 11%; Assume semi-annual coupon payments. Calculate the price of this bond if the YTM is 9.29% QUESTION 9 1. ABC Corp. issued 15-year bonds 2 years ago at a coupon rate of 10.6%. The bonds make semi-annual payments. If these bonds currently sell for 97% of par value, what is the YTM? QUESTION 10 1. The 14.25 percent coupon bonds of the Peterson Co. are selling for $927.11. The bonds mature in 5 years and pay interest semi-annually. These bonds have current yield of _____ percent. QUESTION 11 1. ABC's Inc.'s bonds currently sell for $1,280 and have a par value of $1,000. They pay a $135 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,050. What is their yield to call (YTC)? QUESTION 12 1. ABC wants to issue 11-year, zero coupon bonds that yield 7.79 percent. What price should they charge for these bonds if they have a par value of $1,000? That is, solve for PV. Assume annual compounding. Hint: zero coupon bonds means PMT = 0 QUESTION 13 1. The rate required in the market on a bond is called the: yield to maturity call yield risk premium liquidity premium current yield QUESTION 14 1. The yield to maturity on a Marshall Co. premium bond is 7.6 percent. This is the: nominal rate. effective rate. real rate. current yield. coupon rate. QUESTION 15 1. You paid $1,178 for a corporate bond that has a 5.36% coupon rate. What is the current yield? Hint: if nothing is mentioned, then assume par value = $1,000 QUESTION 16 1. The 8.1 percent, $1,000 face value bonds of Tim McKnight, Inc., are currently selling at $855.1. What is the current yield? QUESTION 17 1. BCD's $1,000 par value bonds currently sell for $798.40. The coupon rate is 10%, paid semi-annually. If the bonds have 5 years to maturity, what is the yield to maturityStep by Step Solution
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