Q1

XYZ bonds have 15 years remaining to maturity. interest is paid annually, they have a $1,000 par value, the coupon interest rate is 9%, and the yield to maturity is 11%. What is the bond's current market price?

Q2

A bond has a $1,000 par value, 15 years to maturity, and a 6.5% annual coupon and sells for $973.

(a) What is its yield to maturity?

(b) Assume that the yield to maturity remains constant for the next 7 years. what will the price be 7 years from today?

Q3

Beecroft Corporation's outstanding bonds have a $1,000 par value, a 5.5% semiannual coupon, 14 years to maturity, and an 8% yield to maturity. what is the bond's price?

Q4

a firm's bonds have a maturity of 10 years with a $1,000 face value, have a 9% semiannual coupon, are callable in 3 years at $1,255, and currently sell at a proce of $1,107.09.

(a) What are their nominal yield to maturity and their nominal yield to call?

(b) What return should investors expect to earn on these bonds?

Q5

An investor has two bonds in his portfolio that have a face value of $1,000 and pay an 8% annual coupon. Bond L matures in 8 years, while bond S matures in 2 years.

(a) What will the value of each bond be if the going interest rate is 6%, 8%, and 12%?

(b) Why does the longer-term bond's price vary more than the price of the shorter-term bind when the interest rates change?