You can invest funds at 8.40% (annually). You are considering buying an annually and are comparing two alternatives? Both of these are 25 years in length, with the same number of monthly payments (to you) of $4, 500. The first instrument pays at the "end" of the month while the second pays at the "beginning" of the month. You believe that the second alternative must be worth more as the money comes to you faster, but how much more is it worth to you? a) $40 b) $480 c) $2, 634 d) $3, 944 e) $6,000 The While Pony Corporation has $1,000 face value bonds issued with a 7% coupon. They mature in 6 years and call for semi annual payments and currently have a yield to maturity of 5.5%. What will happen to the price of the bond if the market interest rate suddenly decreases to 4% a) The bond price will increase but still trade at a discount b) The bond price will increase and trade at a premium c) The bond price will decrease but still trade at a premium d) The bond price will decrease and trade at a discount e) The bond price will remain unchanged Bonds issued by Cyberdine Systems Corporation bear a 6.00% coupon, payable quarterly. The bonds mature in 10 years and have a $1,000 face value. Currently the bonds sell for $1, 143.50. What is the yield to maturity? a) 5.25% b) 4.96% c) 8.10% d) 6.18% e) 4.23% Very Big Corp. of America has $1,000 face value bonds currently sell for $1, 800. They have a 7.5% coupon rate. What is the current yield on these bonds? a) 4.58% b) 3.09% c) 5.18% d) 4.17% e) 9.65%