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[Show Calculation] A coupon bond has 6% coupon rate (paid semiannually), $1,000 par value, matures in 6 years, and has YTM of 10%. The price
- [Show Calculation] A coupon bond has 6% coupon rate (paid semiannually), $1,000 par value, matures in 6 years, and has YTM of 10%. The price of this bond is __________.
- $822.73
- $922.78
- $924.18
- $1,079.85
- None of the above options is correct.
2. A coupon bond that pays interest of $100 annually has a par value of $1,000, matures in 5 years, and has YTM of 10%. The price of this bond is __________.
- $900
- $1,000
- $1,100
- $2,000
- None of the above options is correct.
3. Which of the following statements is correct?
- Collateralized debt obligations can be considered as insurance policies on the default risk.
- Historical data tells us that the default risk premium is typically lower in weak economic conditions.
- Junk bonds are bonds that are currently in default.
- A bond may provide investors a negative return even without a default.
- None of the above statement is correct.
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