Question 1 1 pts You paid $1185 for a corporate bond that has a 11.45% coupon rate. What is the current yield?

Question 1

1 pts

You paid $1185 for a corporate bond that has a 11.45% coupon rate. What is the current yield?

Hint: if nothing is mentioned, then assume par value = $1,000

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

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Question 2

1 pts

Assume that you wish to purchase a 14-year bond that has a maturity value of $1000 and a coupon interest rate of 10%, paid semiannually. If you require a 11.26% rate of return on this investment (YTM), what is the maximum price that you should be willing to pay for this bond? That is, solve for PV.

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 3

1 pts

The 13.56 percent coupon bonds of the Peterson Co. are selling for $849.14. The bonds mature in 5 years and pay interest semi-annually. These bonds have current yield of _____ percent.

Enter your answer in percentages rounded off to two decimal points.

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Question 4

1 pts

ABC has issued a bond with the following characteristics:

Par: $1000; Time to maturity: 9 years; Coupon rate: 5%;

Assume semi-annual coupon payments. Calculate the price of this bond if the YTM is 8.22%

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 5

1 pts

BCD's $1,000 par value bonds currently sell for $798.40. The coupon rate is 10%, paid semi-annually. If the bonds have 5 years to maturity, what is the yield to maturity?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

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Question 6

1 pts

The rate required in the market on a bond is called the:

risk premium

yield to maturity

call yield

current yield

liquidity premium

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Question 7

1 pts

The 6.67 percent, $1,000 face value bonds of Tim McKnight, Inc., are currently selling at $857.3. What is the current yield?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

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Question 8

1 pts

ABC has issued a bond with the following characteristics:

Par: $1000; Time to maturity: 14 years; Coupon rate: 10%;

Assume annual coupon payments. Calculate the price of this bond if the YTM is 10.45%

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 9

1 pts

Stealers Wheel Software has 9.99% coupon bonds on the market with nine years to maturity. The bonds make semi-annual payments and currently sell for 104.68% of par. What is the current yield?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

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Question 10

1 pts

The 8 percent coupon bonds of the Peterson Co. are selling for 98 percent of par value. The bonds mature in 5 years and pay interest semi-annually. These bonds have a yield to maturity of _____ percent.

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Question 11

1 pts

The yield to maturity on a Marshall Co. premium bond is 7.6 percent. This is the:

nominal rate.