1. Capital Corp. issued a 15-year bond 3 years ago at a coupon rate of 5.2 percent. The bonds make annual payments. If these bonds currently sell for 109 percent of par value, what is the approximate YTM?
a. 4.3 %
b. -0.7 %
c. 2.1 %
d. 13.7 %
e. 2.1 %
2. You purchase a bond with an invoice price ( i.e. dirty price) of $906 (Par value is $1,000). The bond has a coupon rate of 6.7 percent, and there are 2 months to the next semiannual coupon date. What is the clean price of the bond?
a. 883.67
b. 928.33
c. 865.77
d. 979.77