The remaining questions are all about bonds that pay half of their coupons every 6 months.

Q18: Google issued a bond on 1/1/20X1. The bond has $1,000 face value, a 8% coupon rate, and it matures on 1/1/20X9. Today, 1/2/20X7, the bond is trading at $990 per bond. The remaining contractual cash flows for this bond are as listed below.

Date Cash Flow

7/1/20X7 $40

1/1/20X8 $40

7/1/20X8 $40

1/1/20X9 $40

1/1/20X9 $1,000

Which is closest to the r for this bond today? Hints: r is in time units of 6 months, with semi-annual compounding. Use trial and error. Plug in the suggested r's until you find the one that works best.

A. 0.043

B. 0.036

C. 0.040

D. 0.049

Q19 Google issued a bond on 1/1/20X1. The bond has $1,000 face value, a 8% coupon rate, and it matures on 1/1/20X9. Today, 1/2/20X7, the bond is trading at $990 per bond. The remaining contractual cash flows for this bond are as listed below. Date Cash Flow 7/1/20X7 $40 1/1/20X8 $40 7/1/20X8 $40 1/1/20X9 $40 1/1/20X9 $1,000 What is the Yield to Maturity (YTM) of this bond today? Hints: Start with your answer from the previous Google bond question. Remember YTM = EAIR. (Do not round intermediate calculations and do not enter your answer as a percent. Round your answer to 3 decimal places, e.g., 0.315 instead of 31.5%.)