Question 4 please!

than an otherwise similar bond that doesn't have those features. (e) A firm will call their bonds (if allowed) when interest rates increase. X 3. Which term describes the situation whereby you keep your bond, but have the right to purchase new common stock at a pre-specified price? In other words, after the transaction you own both bonds and stock in the same company. a. Bond with a call provision b. Bond with a warrant c. Bond with a pre-emptive right d. Bond with a proxy attached 4. You bought a bond for $850 with 10 years to maturity, a coupon rate of 8% (paid annually), and par value equal to $1,000. At the time of purchase your required return was 10%. Three years later you want to sell, but interest rates have decreased and the current market rate on similar bonds is 9%. What price can you sell your bonds for today (so 3 years after the initial purchase)? a. $1,000 b. $491.56 c. $547.03 d. $949.67 e. $974.69 5. Five years ago, Janet purchased a $1,000 par value bond with a 8% coupon rate and a 15 -year maturity. At the time of purchase, the bond had an expected YTM of 10.45%. What price did Jane pay for the bond five years ago? a. $818.34 b. $1209.71 FV=10PV=7