Question 1

1pts

You paid $1185 for a corporate bond that has a 11.45% coupon rate. What is the current yield?

Hint: if nothing is mentioned, then assume par value = $1,000

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

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Question 2

1pts

Assume that you wish to purchase a 14-year bond that has a maturity value of $1000 and a coupon interest rate of 10%, paid semiannually. If you require a 11.26% 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.

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 3

1pts

The13.56 percent coupon bonds of the Peterson Co. are selling for$849.14. The bonds mature in 5 years and pay interest semi-annually. These bonds have current yield of _____ percent.

Enter your answer in percentages rounded off to two decimal points.

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Question 4

1pts

ABChas issued a bond with the following characteristics:

Par: $1000;Time to maturity:9 years;Coupon rate: 5%;

Assume semi-annual coupon payments.Calculate the price of this bond if the YTM is 8.22%

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 5

1pts

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 maturity?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

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Question 6

1pts

The rate required in the market on a bond is called the:

risk premium

yield to maturity

call yield

current yield

liquidity premium

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Question 7

1pts

The6.67 percent, $1,000 face value bonds of Tim McKnight, Inc., are currently selling at $857.3. What is the current yield?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

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Question 8

1pts

ABChas issued a bond with the following characteristics:

Par: $1000;Time to maturity:14 years;Coupon rate: 10%;

Assume annual coupon payments.Calculate the price of this bond if the YTM is 10.45%

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 9

1pts

Stealers Wheel Software has 9.99% coupon bonds on the market with nine years to maturity. The bonds make semi-annual payments and currently sell for 104.68% of par. What is the current yield?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

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Question 10

1pts

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.

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Question 11

1pts

The yield to maturity on a Marshall Co. premium bond is 7.6 percent. This is the:

nominal rate.

coupon rate.

current yield.

effective rate.

real rate.

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Question 12

1pts

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?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

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Question 13

1pts

ABC'sInc.'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)?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

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Question 14

1pts

ABCwants to issue 23-year, zero coupon bonds that yield7.77 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

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 15

1pts

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)?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

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Question 16

1pts

A premium bond is a bond that:

has a face value in excess of $1,000.

is callable within 12 months or less.

has a market price which exceeds the face value.

is selling for less than par value.

has a par value which exceeds the face value.

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Question 17

1pts

ABC'sbonds 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?