Question 18

One year ago, Carson Industries issued a 10-year, $1,000 PAR coupon bond at its PAR value. This Bond's annual coupon rate is 13%. Coupons are paid 2 times in a year. The Bond is currently trading at $900. However, this bond can be called in 6 years from today at a price of $1065

What is the YTC (Yield to Call) of this Bond? In other words, what is the Bond investor's return if the Bond is called? Enter your answer in the following format: 0.1234 Hint: Answer is between 0.1505 and 0.1816

Question 19

Which of the following are part of the "Bond Terminology"?

	A.	Real Interest Rate
	B.	PAR (or face value or Principal)
	C.	Maturity Date
	D.	Coupon
	E.	Growing Perpetuity

Question 20

Which of the following statements regarding the "Basic Bond Valuation Equation" is FALSE?

	A.	PV of Bond Coupons is computed using the Growing Annuity formula
	B.	PV of a Zero-Coupon Bond depends entirely on the par value and the discount factor
	C.	Present Value of a Bond has two components: PV of Coupon Payments and PV of Principal Payment
	D.	PV of a Bond = (coupon x annuity factor) + (par value x discount factor)