QUESTION 15 'One year ago, you purchased a 5-year TIPS bond that has par=$1,000 and a 8.9% coupon rate, compounded semi-annually. The average inflation rate was 1.7% over the first 6 months and 2.27% over the second 6 months. What is the current face value of the bond?" a. $1,086.37 b. $1,040.09 c. $1.000 d. $1,132.65 QUESTION 16 'A 10-year 8% coupon bond that has par value of $1,000 and is selling today at a $75 premium to its par value. What's the bond's yield to maturity?' a. 8.84% b. 8.00% c. 6.94% d. 12.00% QUESTION 17 "A bank buys bonds with a par value of $25 million for $27 million. The coupon rate is 10 percent, and the bonds mature in five years. The bank wants to sell them in two years and estimates the interest rate in two years will be 6.6 percent. What will the market value of the bonds be in two years?" a. $27.25 b. $26.55 c. $28.31 d. $28.90