Question No 1:

BA Corp is issuing a 10-year bond with a coupon rate of 8 percent. Th e interest rate for similar bonds is currently 6 percent. Assuming annual payments, what is the value of the bond?

Question No 2:

Pierre Dupont just received a cash gift from his grandfather. He plans to invest in a fi ve-year bond issued by Venice Corp. that pays an annual coupon of 5.5 percent. If the current market rate is 7.25 percent, what is the maximum amount Pierre should be willing to pay for this bond?

Question No 3:

Knight, Inc., has issued a three-year bond that pays a coupon of 6.10 percent. Coupon payments are made semiannually. Given the market rate of interest of 5.80 percent, what is the market value of the bond?

Question No 4:

Zero coupon bonds: Diane Carter is interested in buying a fi ve-year zero coupon bond with a face value of $1,000. She understands that the market interest rate for similar investments is 9 percent. Assume annual coupon payments. What is the current value of this bond?