1. The 4.6 percent bond of LA Motors has a face value of $1,000, a maturity of 8 years, semiannual interest payments, and a yield to maturity of 7.22 percent. What is the current market price of the bond?
A. $842.87
B. $847.21
C. $903.05
D. $959.60
E. $972.40
2. A U.s. Treasury bond pays 3.27 percent interest. You are in the 28 percent marginal tax bracket. What is your after tax yield on this bond?
A. 2.05 percent
B. 2.35 percent
C. 2.50 percent
D. 3.11 percent
E. 3.18 percent