Question

a
20 year, 8% coupon rate, $1,000 par bond that pays interest
semi-annually bought five years ago for $850. this bond is
currently sold for 950. what is the yield on this bond?

a.12.23%

b.11.75%

c.12.13%

d.11.23%

an increase in interest rates will lead to an increase in the
value of outstanding bonds.

a. true

b. false

a bond will sell ____ when coupon rate is less than yield to
maturity, ______ when coupon rate exceeds yield to maturity, and
______ when coupon rate is equal to yield to maturity.

a. at a discount, at a premium, at par

b. at a premium, at a discount, at par

c. at par, at a discount, at a premium

d. at par, at a premium, at a discount

Answer #1

1. **b. 11.75%**

2. The change in interest rates is inversely proportional to the
change in the value of the bonds. If the interest rates increase,
then the value of the bonds is decreased (because bonds always pay
fixed amount of interest) and vice versa. Hence, the given
statement is **B.** **FALSE.**

3. When coupon rate is more than the yield to maturity, then
demand for the bond raises and hence, it is sold at premium and
vice versa. So, a bond will sell **at discount** when
coupon rate is less than yield to maturity, **at
premium** when coupon rate exceeds yield to maturity, and
**at par** when coupon rate is equal to yield to
maturity.

Hence, the answer is **a.**

A coupon bond that pays interest semi-annually has a par value
of $1,000, matures in five years, and has a yield to maturity of
10%. The intrinsic value of the bond today will be __________ if
the coupon rate is 8%.
Multiple Choice
$1,077.20
$1,075.80
$922.78
None of the options
$924.16

A bond has a coupon rate of 4.6% and pays coupons semi-annually.
The bond matures in 5 years and the yield to maturity on similar
bonds is 2%. Is this a par, premium or discount bond? What is the
price of the bond?
What is the coupon rate for the bond? Assume semi-annual
payments. Answer as a percent!
Bond
Coupon Rate
Yield
Price Quote
t
Apple B
?
3.7%
99.09
21

A $1000 par value bond has a coupon rate of 7.7%, pays interest
semi-annually, matures in 22 years, and is priced at a 82.97
discount from par value. What is the annual yield to maturity of
this bond? (Answer to the nearest one hundedth of a percent, i.e.,
1.23 but do not include the % sign).

A coupon bond that pays interest of $40
semi-annually has a par value of $1,000, matures in four years, and
is selling today at a $36 discount from par value. The yield to
maturity on this bond is
I need the answer to be worked out by hand and step-by step. I
need to know where all the numbers come from

You are considering a coupon bond (par=$1,000) that pays
semi-annual interest with a coupon rate of 6%. The bond currently
has a bid price of 116.89 and an ask price of 117.00. If the last
interest payment was made 60 days ago, and there are 180 days
between the last interest payment and the next interest payment,
what is the invoice price of the bond?
A.
$1,180.0
B.
$1,170.0
C.
$1,190.6
D.
$1,168.9
You purchase a 10-year T-note which has...

A $1,000 par value bond is currently valued at $1,055. The bond
pays interest semi-annually, has 10 years to maturity, and has a
yield to maturity of 7.3 percent. The coupon rate is _____ percent
and the current yield is _____ percent.

A) A Norwegian “oil”-bond has a 12 % coupon rate, matures in 20
years and pays interest semi-annually. The face value is 1,000 NOK.
What is the current price of this “oil”-bond if the market rate of
return (e.g. the discount rate) is 8 %?
B) Is this bond selling at par, premium or discount?
C) What is the current yield?
D) Is the yield to maturity (YTM) for this bond higher or lower
than the current yield?

What is the current price of a $1,000 par value, 8% coupon bond
that pays interest semi-annually if the bond matures in 7 years and
has a yield-to-maturity of 12%?
A.$814.1
B.$1,058.33
C.$817.45
D.$469.75

A $1,000 par-value bond with 5 years of maturity pays a 5%
coupon rate, paid annually. What is the value of the bond if your
required rate of return is 5%?
2. A $1,000 par-value bond with 5 years of
maturity pays a 5% coupon rate, paid semi-annually. What is the
value of the bond if your required rate of return is 5%?
3. A $1,000 par-value bond with 5
years of maturity pays a 5% coupon rate, paid semi-annually. What...

A $15 000, 8% bond with semi-annual interest coupons redeemable at
par in seven years is bought to yield 7% compounded semi-annually.
Determine the amount of premium or discount.

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