1. You purchase an annual bond with a dirty price of $1,200. The bond has a coupon rate of 10 percent, and there are five months to the next annual coupon date. What is the clean price of the bond? A. $1,183.33 B. $1,141.67 C. $1,049.07 D. $1,191.67 E. $1,051.33

2. For a bond selling at par, the yield to maturity must be _____________.

A. Greater than the coupon rate.

B. Less than the coupon rate.

C. Greater than the face value.

D. Greater than the required rate of return.

E. Equal to the coupon rate.

3. A $1,000 face value 5-year zero coupon bond is selling at par. What is the YTM if the market interest rate is 7%? A. $.39 B. $3.86 C. $38.62 D. 7% E. $1,038.62