A bond with a face value of $1,000 has annual coupon payments of $80 and was issued 15 years ago. The bond currently sells for $1,000 and has 10 years left to maturity. This bond's _______________ must be 8%.
I. yield to maturity
II. current yield
III. coupon rate
a. I only
b. I and II only
c. III only
d. II and III only
e. I, II and III
2. Assume that as of today the annualized rate on a two year security is 13%, while the annualized interest rate on a one year security is 9%. Assuming that interest is compounded, use this information to find the forward rate on a security with a maturity of one year one year from now.
A) 17.00%
B) 17.15%
C) 16.85%
D) 5.00%
E) 5.14%