Annual coupon rate Answer: d Diff: E N
62. An annual coupon bond with a $1,000 face value matures in 10 years. The bond currently sells for $903.7351 and has a 9 percent yield to maturity. What is the bond’s annual coupon rate?
a. 6.7%
b. 7.0%
c. 7.2%
d. 7.5%
e. 7.7%
Bond value--annual payment Answer: d Diff: E
63. A 12-year bond has a 9 percent annual coupon, a yield to maturity of
8 percent, and a face value of $1,000. What is the price of the bond?
a. $1,469
b. $1,000
c. $ 928
d. $1,075
e. $1,957
Bond value--semiannual payment Answer: e Diff: E
64. You intend to purchase a 10-year, $1,000 face value bond that pays interest of $60 every 6 months. If your nominal annual required rate of return is 10 percent with semiannual compounding, how much should you be willing to pay for this bond?
a. $ 826.31
b. $1,086.15
c. $ 957.50
d. $1,431.49
e. $1,124.62
Bond value--semiannual payment Answer: d Diff: E
65. Assume that you wish to purchase a 20-year bond that has a maturity value of $1,000 and makes semiannual interest payments of $40. If you require a 10 percent nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?
a. $619
b. $674
c. $761
d. $828
e. $902
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