Suppose the following bond quotes for IOU Corporation appear in the financial page of

today's newspaper. Assume the bond has a face value of $$2,000$ and the current date is

April $19,2018.$

a$.$ What is the yield to maturity of the bond? $($Do not round intermediate calculations

and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

b$.$ What is the current yield? $($Do not round intermediate calculations and enter your

answer as a percent rounded to $2$ decimal places,$($e$.$g$.,32\mathrm{.}16.)$

Suppose the real rate is $3$ percent and the inflation rate is $4\mathrm{.}6$ percent.

What rate would you expect to see on a Treasury bill? $($Do not: round intermediate

calculations and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,$

$32\mathrm{.}16.)$

Suppose the real rate is $3$ percent and the inflation rate is $4\mathrm{.}6$ percent.

What rate would you expect to see on a Treasury bill? $($Do not round intermediate

calculations and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,$

$32\mathrm{.}16.)$Suppo

Wesimann Co$.$ issued $10-$year bonds a year ago at a coupon rate of $7$ percent. The bonds

make semiannual payments and have a par value of $$1,000.$ If the YTM on these bonds

is $5\mathrm{.}3$ percent, what is the current bond price? $($Do not round Intermedlate calculatlons

and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

Current bond price

Bond $J$ has a coupon rate of $3$ percent and Bond $K$ has a coupon rate of $9$ percent. Both

bonds have $13$ years to maturity, make semiannual payments, and have a YTM of $6$

percent.

a$.$ If interest rates suddenly rise by $2$ percent, what is the percentage price change of

these bonds? $($A negative answer should be indicated by a minus sign. Do not

round intermediate calculations and enter your answers as a percent rounded to

$2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

b$.$ What if rates suddenly fall by $2$ percent instead? $($Do not round intermediate

calculations and enter your answers as a percent rounded to $2$ decimal places,

e$.$g$.,32\mathrm{.}16.)$

Union Local School District has a bond outstanding with a coupon rate of $3\mathrm{.}3$ percent

paid semiannually and $20$ years to maturity. The yield to maturity on this bond is $3\mathrm{.}7$

percent, and the bond has a par value of $$10,000.$

What is the price of the bond? $($Do not round intermediate calculations and round your

answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$