1. One year ago Lerner and Luckmann Co. issued 15-year, noncallable, 5.5% annual coupon bonds at their par value of $1,000. Today, the market interest rate on these bonds is 5.5%. What is the current price of the bonds, given that they now have 14 years to maturity?
a. $1,000.00
b. $990.37
c. $993.58
d. $1,003.21
e. $996.79
2. Field Industries' outstanding bonds have a 25-year maturity and $1,000 par value. Their nominal yield to maturity is 9.25%, they pay interest semiannually, and they sell at a price of $1,075. What is the bond's nominal (annual) coupon interest rate?
a. 9.86%
b. 9.70%
c. 10.18%
d. 10.02%
e. 10.34%