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S. V. Balachandra purchased Premia Inc.'s 12-year, 1 7/8% bonds 2 years ago. He is considering...

S. V. Balachandra purchased Premia Inc.'s 12-year, 1 7/8% bonds 2 years ago. He is considering selling them and noted the current price of the bonds is $98.75 per $100. At this price, the yield to maturity is closest to:

   A.   1.9926%.

    B.   2.0136%.

    C.   2.1399%.

Gibralta Industries is issuing a bond with a 4.50% coupon rate that matures in 10 years. At a yield to maturity of 3.95%, the price per $100 is closest to:

    A.   $104.51.

    B.   $104.47.

C.   $95.61.

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Answer #1

Question 1: B. 2.0136%

Answer 2: $104.47

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