1. A $5000 bond with a coupon rate of 5.2% paid semiannually has nine years to maturity and a yield to maturity of 7.5%. If interest rates rise and the yield to maturity increases to 7.8%, what will happen to the price of the bond?
The price of the bond will fall by $86.66.
The price of the bond will fall by $103.99.
The price of the bond will rise by $86.66.
The price of the bond will not change.
2. The Sisyphean Company has a bond outstanding with a face value of $5000 that matures in 5 years. The bond certificate indicates that the stated coupon rate for this bond is 8.3% and that the coupon payments are to be made semiannually. How much will each semiannual coupon payment be?
3. A $5000 bond with a coupon rate of 5.3% paid semiannually has nine years to maturity and a yield to maturity of 6.6%. If interest rates fall and the yield to maturity decreases by 0.8%, what will happen to the price of the bond?
4. What must be the price of a $10,000 bond with a 6.6% coupon rate, semiannual coupons, and nine years to maturity if it has a yield to maturity of 10% APR?
5. How much would the monthly payments be on a $36,000 student loan with the terms 6% APR for 48 months?
6. As a result of the subprime collapse, the demand for low -quality corporate bonds ________, the demand for high-quality Treasury bonds ________, and the risk spread ________.
decreased; increased; was unchanged
increased; decreased; was unchanged
increased; decreased; decreased
decreased; increased; increased