1. IBM has outstanding bonds with an annual 8% coupon. The bonds have a par value of $1,000 and a price of $865. The bonds will mature in 11 years. What is their Yield to Maturity? (using Financial calculator)
A) 8.00%
B) 9.25%
C) 9.89%
D) 10.09%
E) 11.13%
2. What should be the price of an 8-year bond with a coupon rate of 6%, a face value of $1,000, and a required rate of return of 7%, if it pays coupons semi-annually?(using financial calculator)
A) $761.15
B) $934.58
C) $939.53
D) $940.29
E) $952.23