QUESTION 12

1. Moerdyk Corporations bonds have a 18-year maturity, a 5.25% semiannual coupon, and a par value of $1,000. The going interest rate (r_d) is 4.75%, based on semiannual compounding. What is the bonds price?

1. A.1060.05
2. B.1100.56
3. C.1030.45
4. D.1000

QUESTION 13

1. OBrien Ltd.s outstanding bonds have a $1,000 par value, and they mature in 16 years. Their nominal yield to maturity is 9.00%, they pay interest semiannually, and they sell at a price of $960. What is the bonds nominal (annual) coupon interest rate?

1. A.8.35%
2. B.8.52%
3. C.9.00%
4. D.4.26%

QUESTION 14

1. A 29-year, $1,000 par value bond has an 9.25% annual coupon. The bond currently sells for $945. If the yield to maturity remains at its current rate, what will the price be 4 years from now?

1. A.940.85
2. B.945.00
3. C.946.77
4. D.982.90

QUESTION 15

1. A bond is currently priced at $900 on a par value of $1,000. Its term to maturity is 10 years and its coupon rate is 8% (stated annually, paid semiannually). If you buy the bond, and hold it to maturity, what would be the yield to maturity?

1. A.10.25%
2. B.8.00%
3. C.9.00%
4. D.9.58%