1. Eight years ago a Fortune 100 company issued a 30-year bond with an 8% coupon paid semi-annually and the current price is 94% of its face value. If interest rates move upward the price of this bond can be expected to ___________.
stay the same
increase
decrease
Not enough information to determine
2. Current Yield on a Bond. Assume Blue Chip Corporation's bonds currently sell for $1,100. They have a 6-year maturity, an annual coupon of $80, and a par value of $1000. What is the current yield or the yield in the next one year?
7.14%
7.27%
7.88%
8.27%
8.68%
3. Yield to Maturity. Assume that Tennis Galaxy bonds currently sell for $1,300, have a par value of $1000, a call value of $1,200, an annual coupon payment of $100. The bonds have a 15-year maturity, but can be called in 10 years at $1,200. What is the yield to maturity (YTM)?
6.63%
6.75%
7.14%
7.74%
8.12%
4. Yield to Call. Assume that Tennis Galaxy bonds currently sell for $1,300, have a par value of $1000, a call value of $1,200, an annual coupon payment of $100. The bonds have a 15-year maturity, but can be called in 10 years at $1,200. What is the yield to call (YTC)?
6.63%
6.75%
7.14%
7.74%
8.12%
5. YTM. In this case, assume Golf Galore's non-callable bonds currently sell for $1,500. They have a 12-year maturity, an annual coupon of $75, and a par value of $1,000 (reminder: the par value is $1000 unless stated otherwise). What is their annual yield to maturity or YTM?
2.59%
5.02%
5.96%
6.25%
7.17%