Question 1) What is the approximate yield to call of a 10% coupon rate, $1,000 par value bond, currently priced at $1200, if the call can be made in seven years at a price of $1,025?
Question 2) A convertible bond has a face value of $1,000 and the conversion price is $60 per share. The stock is selling at $25 per share. The bond pays $85 per year in interest and is selling in the market for $945. It matures in seven years. Market rates are 10% annually.
(I) What is the conversion ratio?
(II) What is the conversion value?
Question 3) If a $100,000 Treasury bond futures contract changes by 15/32, what is the dollar change?
Question 4) A shopping center has an annual net operating income of $1,050,000 and a capitalization rate of 8%. What is its value?
Question 5) An investment has the following range of outcomes and probabilities.
Outcomes (Percent) Probabilities of Outcomes
6% .25
9% .50
10% .25
Calculate the expected value and the standard deviation (round to two places after the decimal point where necessary).A.
Expected value = 8.50
Standard deviation = 1.50
Refer to Equation 17-1
Ki Pi ∑KiPi
6% .25 1.50
9% .50 4.50
10% .25 2.50
∑KiPi 8.50
Question 6) A mutual fund i et up to charge a load. Its net asset value is $17.70 and its offer price is $18.60. What is the dollar value of the load (commission)?