QUESTION 1
You paid $832 for a corporate bond that has a 5.51% coupon rate. What is the current yield?
Hint: if nothing is mentioned, then assume par value = $1,000
Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.
QUESTION 2
The yield to maturity on a Marshall Co. premium bond is 7.6 percent. This is the:
nominal rate.
effective rate.
real rate.
current yield.
coupon rate.
QUESTION 3
The rate required in the market on a bond is called the:
liquidity premium
call yield
risk premium
yield to maturity
current yield
QUESTION 4
A premium bond is a bond that:
is callable within 12 months or less.
has a market price which exceeds the face value.
has a par value which exceeds the face value.
is selling for less than par value.
has a face value in excess of $1,000.
QUESTION 5
ABC has issued a bond with the following characteristics:
Par: $1,000; Time to maturity: 16 years; Coupon rate: 4%;
Assume semi-annual coupon payments. Calculate the price of this bond if the YTM is 9.64%
Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
QUESTION 6
ABC's Inc.'s bonds currently sell for $1,280 and have a par value of $1,000. They pay a $135 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,050. What is their yield to call (YTC)?
Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.
QUESTION 7
The 8 percent coupon bonds of the Peterson Co. are selling for 98 percent of par value. The bonds mature in 5 years and pay interest semi-annually. These bonds have a yield to maturity of _____ percent.
QUESTION 8
ABC's bonds have a 9.5 percent coupon and pay interest semi-annually. Currently, the bonds are quoted at 106.315 percent of par value. The bonds mature in 8 years. What is the yield to maturity?
QUESTION 9
Stealers Wheel Software has 5.25% coupon bonds on the market with nine years to maturity. The bonds make semi-annual payments and currently sell for 109.17% of par. What is the current yield?
Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box
QUESTION 10
ABC has issued a bond with the following characteristics:
Par: $1,000; Time to maturity: 13 years; Coupon rate: 4%;
Assume annual coupon payments. Calculate the price of this bond if the YTM is 7.12%
Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
QUESTION 11
The 5.2 percent, $1,000 face value bonds of Tim McKnight, Inc., are currently selling at $889.55. What is the current yield?
Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.
QUESTION 12
Assume that you wish to purchase a 14-year bond that has a maturity value of $1,000 and a coupon interest rate of 5%, paid semiannually. If you require a 5.77% rate of return on this investment (YTM), what is the maximum price that you should be willing to pay for this bond? That is, solve for PV.
Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
QUESTION 13
ABC wants to issue 19-year, zero coupon bonds that yield 11.5 percent. What price should they charge for these bonds if they have a par value of $1,000? That is, solve for PV. Assume annual compounding.
Hint: zero coupon bonds means PMT = 0
Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
QUESTION 14
The 12.4 percent coupon bonds of the Peterson Co. are selling for $1,114.17. The bonds mature in 5 years and pay interest semi-annually. These bonds have current yield of _____ percent.
Enter your answer in percentages rounded off to two decimal points.
QUESTION 15
ABC Corp. issued 15-year bonds 2 years ago at a coupon rate of 10.6%. The bonds make semi-annual payments. If these bonds currently sell for 97% of par value, what is the YTM?
Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.