Please help with this quiz of 12 Finance questions. (Pearson)

7) (Bond valuation) Fingen's 18-year, $1,000 par value bonds pay 9 percent interest annually. The market price of the bonds is $1,080 and the market's required yield to maturity on a comparable-risk bond is 10 percent. a.Compute the bond's yield to maturity. b.Determine the value of the bond to you, given your required rate of return. c.Should you purchase the bond? a.What is your yield to maturity on the Fingen bonds given the market price of the bonds? % (Round to two decimal places.) _____________ 8) (Yield to maturity) Abner Corporation's bonds mature in 17 years and pay 11 percent interest annually. If you purchase the bonds for $1,275, what is your yield to maturity? Your yield to maturity on the Abner bonds is %. (Round to two decimal places.) ________ 9) (Bond valuation) The 7-year $1,000 par bonds of Vail Inc. pay 15 percent interest. The market's required yield to maturity on a comparable-risk bond is 14 percent. The current market price for the bond is $1,120. a.Determine the yield to maturity. b.What is the value of the bonds to you given the yield to maturity on a comparable-risk bond? c.Should you purchase the bond at the current market price? a. What is your yield to maturity on the Vail bonds given the current market price of the bonds? % (Round to two decimal places.) _______________________ 10) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 6 percent interest annually and have 13 years until maturity. You can purchase the bond for $855. a.What is the yield to maturity on this bond? b.Should you purchase the bond if the yield to maturity on a comparable-risk bond is 99 percent? a. The yield to maturity on the Saleemi bonds is %. (Round to two decimal places.) _______ 11) (Bond valuation relationships) The 16-year, $1,000 par value bonds of Waco Industries pay 7 percent interest annually. The market price of the bond is $895 and the market's required yield to maturity on a comparable-risk bond is 10 percent. a.Compute the bond's yield to maturity. b.Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond. c.Should you purchase the bond? a.What is your yield to maturity on the Waco bonds given the current market price of the bonds? % (Round to two decimal places.) ____________________ 12) (Inflation and interest rates) What would you expect the nominal rate of interest to be if the real rate is 4.5 percent and the expected inflation rate is 6.7 percent? The nominal rate of interest would be %. (Round to two decimal places.) __________________ 1) Floating-rate loans) The Bensington Glass Company entered into a loan agreement with thefirm's bank to finance the firm's working capital. The loan called for a floating rate that was 27 basis points (0.27 percent) over an index based on LIBOR. In addition, the loan adjusted weekly based on the closing value of the index for the previous week and had a maximum annual rate of 2.17 Percent and a minimum of 1.74 percent. Calculate the rate of interest for weeks 2 through 10. Date LIBOR Week 1 1.981.98% Week 2 1.641.64% Week 3 1.511.51% Week 4 1.341.34% Week 5 1.611.61% Week 6 1.621.62% Week 7 1.651.65% Week 8 1.891.89% Week 9 1.891.89% The rate of interest for week 2 is %. (Round to two decimal places.) 2) (Bond valuation) Calculate the value of a bond that matures in 14 years and has a $1,000 par value. The annual coupon interest rate is 9 percent and the market's required yield to maturity on a comparablerisk bond is 11 percent. The value of the bond is $ (Round to the nearest cent.) 3) (Bond valuation) A bond that matures in 20 years has a $1,000 par value. The annual coupon interest rate is 11 percent and the market's required yield to maturity on a comparable-risk bond is 16 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually? a. The value of this bond if it paid interest annually would be $ (Round to the nearest cent.) 4) (Bond valuation) Pybus, Inc. is considering issuing bonds that will mature in 17 years with an annual coupon rate of 7 percent. Their par value will be $1,000, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 11 percent. However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an A rating, the yield to maturity on similar A bonds is 12 percent. What will be the price of these bonds if they receive either an A or a AA rating? a. The price of the Pybus bonds if they receive a AA rating will be $ nearest cent.) (Round to the 5) (Yield to maturity) The market price is $1,075 for a 99-year bond ($1,000 par value) that pays 11 percent annual interest, but makes interest payments on a semiannual basis (5.5 percent semiannually). What is the bond's yield tomaturity? The bond's yield to maturity is %. (Round to two decimal places.) 6) (Bond valuation) Doisneau 18-year bonds have an annual coupon interest of 8 percent, make interest payments on a semiannual basis, and have a $1,000 par value. If the bonds are trading with a market's required yield to maturity of 13 percent, are these premium or discount bonds? Explain your answer. What is the price of the bonds? a. If the bonds are trading with a yield to maturity of 13%, then (Select the best choice below.) A. the bonds should be selling at a premium because the bond's coupon rate is greater than the yield to maturity of similar bonds. B. there is not enough information to judge the value of the bonds. C. the bonds should be selling at par because the bond's coupon rate is equal to the yield to maturity of similar bonds. D. the bonds should be selling at a discount because the bond's coupon rate is less than the yield to maturity of similar bonds