1) If a 7% coupon bond is trading for $975.00, it has a current yield of
A) 7.00%. B) 6.53%. C) 7.24%. D) 8.53%. E) 7.18%.
2) A coupon bond that pays interest annually is selling at par value of $1,000, matures in five years, and has a coupon rate of 9%. The yield to maturity on this bond is
A) 8.0%.
B) 8.3%.
C) 9.0%.
D) 10.0%.
E) None of the options
3) 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%.
A) $922.78
B) $924.16
C) $1,075.80
D) $1,077.20
E) None of the options
4) A zero-coupon bond has a yield to maturity of 9% and a par value of $1,000. If the bond matures in eight years, the bond should sell for a price of ________ today.
A) 422.41
B) $501.87
C) $513.16
D) $483.49
E) None of the options