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You purchased an annual interest coupon bond one year ago that had six years remaining to maturity at that time. The coupon interest rate
You purchased an annual interest coupon bond one year ago that had six years remaining to maturity at that time. The coupon interest rate was 10%, and the par value was $1,000. At the time you purchased the bond, the yield to maturity was 8%. If you sold the bond after receiving the first interest payment and the yield to maturity continued to be 8%, your annual total rate of return on holding the bond for that year would have been O a. 7.00%. O b. 7.82%. c. None of the options are correct. d. 8.00%. e. 11.95%. A Treasury bond due in one year has a yield of 4.6%; a Treasury bond due in five years has a yield of 5.6%. A bond issued by Lucent Technologies due in five years has a yield of 8.9%; a bond issued by Exxon due in one year has a yield of 6.2%. The default risk premiums on the bonds issued by Exxon and Lucent Technologies, respectively, are O a. 1.6% and 3.3%. b. 0.5% and 0.7%. c. None of the options are correct. d. 3.3% and 1.6%. e. 0.7% and 0.5% A coupon bond that pays interest of $90 annually has a par value of $1,000, matures in nine years, and is selling today at a $66 discount from par value. The yield to maturity on this bond is a. 9.00%. b. 10.15%. c. 11.25%. d. 12.32%. e. 12.56%
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