1. You buy two bonds:
A: 5% coupon; 5 year term; $1,000 face value; &
B: 5% coupon; 20 year term; $1,000 face value.
a. Price both of the bonds if you want a 5% yield.
b. Price both of the bonds if you want a 8% yield.
c. Compute the percentage price change from your answers in parts a and b for both bonds.
2. If the firm's current ratio exceeds 1:1 and the firm retires an account payable, then the
A) current ratio decreases
B) gross profit margin increases
C) return on equity increases
D) quick ratio increases