questions 1-10

1. Interpreting Bond Yields [OG LOI] Is the yield to maturity on a bond the same thing as the required return? Is YTM the same thing as the coupon rate? Suppose today a 10 percent coupon bond sells at por. Two years from now, the required return on the same bond is 8 percent. What is the coupon rate on the bond then? The YTM? 2. Interpreting Bond Yields [2] Suppose you buy a 7 percent coupon. 20year bond today when it's firs issued. If interest rates suddenly rise to 15 percent, what happeas to the walue of your bond? Why? 3. Valuing Bonds [(G) LO2] Even thoneh most corporate bonds in the United States make coupon puements semiannually, bonds issued elsewhere often have annial conpon payments. Suppose a German company issues a bond with a par value of 1,000,27 years to maturity, and a coupon rate of 3.6 percent paid annually 18 the sield to maturity is 3.2 percent, what is the current price of the bond in euros? 4. Bond Yields [ LO2] A Japanese company has a bond oetstanding that sells for 96.318 percent of its 4100.000 par value. The bond 23. has a coupon rate of 3.4 percent paid annually and matures in 16 years. What is the yield to maturity of this bond? value of $1,000, and selling for $962. At this price, the bonds yield 5.1 percent. What must the coupon rate be on the bonds? 7. Bend Yields [[S LO2] Ashbura Corp. issued 25 year bonds two years apo at a coupon rate of 5.6 perceat. The boads make semiannual payments. If these bonds currently sell for 97 percent of par value, what is the YTM? 8. Coipon Rates [GS LO2] Draiman Corporation has bonds on the martet with 14.5 years to maturity, a YTM of 5.3 percent, a par value of $1.000. and a curreat price of \$987. The bonds make semianumal payments. What must the coupon rate be on these bonds? 9. Zero Coupou Bends [(3) LO2] You fled a zero cocepon bond with a par value of $10.000 and 24 years to maturity. If the yield to maturity on this bond is 4.2 percent, what is the dollar price of the bond? Assume semianntal conpounding periods. 10. Valuing Bends ([G) LO2) Yan Yan Corp. has a $2.000 par value bond outstandine with a coupon rate of 4.7 perceat paid semiannually and 13 years to maturity. The jield to maturity of the bond is 5.05 percent. What is the dollar price of the bond? 1. Interpreting Bond Yields [OG LOI] Is the yield to maturity on a bond the same thing as the required return? Is YTM the same thing as the coupon rate? Suppose today a 10 percent coupon bond sells at por. Two years from now, the required return on the same bond is 8 percent. What is the coupon rate on the bond then? The YTM? 2. Interpreting Bond Yields [2] Suppose you buy a 7 percent coupon. 20year bond today when it's firs issued. If interest rates suddenly rise to 15 percent, what happeas to the walue of your bond? Why? 3. Valuing Bonds [(G) LO2] Even thoneh most corporate bonds in the United States make coupon puements semiannually, bonds issued elsewhere often have annial conpon payments. Suppose a German company issues a bond with a par value of 1,000,27 years to maturity, and a coupon rate of 3.6 percent paid annually 18 the sield to maturity is 3.2 percent, what is the current price of the bond in euros? 4. Bond Yields [ LO2] A Japanese company has a bond oetstanding that sells for 96.318 percent of its 4100.000 par value. The bond 23. has a coupon rate of 3.4 percent paid annually and matures in 16 years. What is the yield to maturity of this bond? value of $1,000, and selling for $962. At this price, the bonds yield 5.1 percent. What must the coupon rate be on the bonds? 7. Bend Yields [[S LO2] Ashbura Corp. issued 25 year bonds two years apo at a coupon rate of 5.6 perceat. The boads make semiannual payments. If these bonds currently sell for 97 percent of par value, what is the YTM? 8. Coipon Rates [GS LO2] Draiman Corporation has bonds on the martet with 14.5 years to maturity, a YTM of 5.3 percent, a par value of $1.000. and a curreat price of \$987. The bonds make semianumal payments. What must the coupon rate be on these bonds? 9. Zero Coupou Bends [(3) LO2] You fled a zero cocepon bond with a par value of $10.000 and 24 years to maturity. If the yield to maturity on this bond is 4.2 percent, what is the dollar price of the bond? Assume semianntal conpounding periods. 10. Valuing Bends ([G) LO2) Yan Yan Corp. has a $2.000 par value bond outstandine with a coupon rate of 4.7 perceat paid semiannually and 13 years to maturity. The jield to maturity of the bond is 5.05 percent. What is the dollar price of the bond