Finance problems
KnowledgeCats
Question 1
ABC Corp. issued 15-year bonds 2 years ago at a coupon rate of 10.6%. The bonds make semi-annual payments. If these bonds currently sell for 97% of par value, what is the YTM?
Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.
Answer
1 points
Question 2
ABC's bonds have a 9.5 percent coupon and pay interest semi-annually. Currently, the bonds are quoted at 106.315 percent of par value. The bonds mature in 8 years. What is the yield to maturity?
Answer
1 points
Question 3
The yield to maturity on a Marshall Co. premium bond is 7.6 percent. This is the:
Answer
nominal rate.
effective rate.
real rate.
current yield.
coupon rate.
1 points
Question 4
A discount bond has a yield to maturity that:
Answer
exceeds the coupon rate.
equals zero.
is equal to the current yield.
is less than the coupon rate.
equals the bond's coupon rate.
1 points
Question 5
BCD’s $1,000 par value bonds currently sell for $798.40. The coupon rate is 10%, paid semi-annually. If the bonds have 5 years to maturity, what is the yield to maturity?
Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.
Answer
1 points
Question 6
The 14.8 percent, $1,000 face value bonds of Tim McKnight, Inc., are currently selling at $1,077.39. What is the current yield?
Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.
Answer
1 points
Question 7
The rate required in the market on a bond is called the:
Answer
call yield
risk premium
liquidity premium
yield to maturity
current yield
1 points
Question 8
You paid $1,183 for a corporate bond that has a 5.38% coupon rate. What is the current yield?
Hint: if nothing is mentioned, then assume par value = $1,000
Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.
Answer
1 points
Question 9
ABC has issued a bond with the following characteristics:
Par: $1,000; Time to maturity: 8 years; Coupon rate: 4%;
Assume semi-annual coupon payments. Calculate the price of this bond if the YTM is 7.9%
Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
Answer
1 points
Question 10
ABC Inc., has $1,000 face value bonds outstanding. These bonds mature in 3 years, and have a 6.5 percent coupon. The current price is quoted at 98.59 percent of par value. Assume semi-annual payments. What is the yield to maturity?
Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.
Answer
1 points
Question 11
ABC's Inc.'s bonds currently sell for $1,280 and have a par value of $1,000. They pay a $135 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,050. What is their yield to call (YTC)?
Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.
Answer
1 points
Question 12
The 8 percent coupon bonds of the Peterson Co. are selling for 98 percent of par value. The bonds mature in 5 years and pay interest semi-annually. These bonds have a yield to maturity of _____ percent.
Answer
1 points
Question 13
Stealers Wheel Software has 9.1% coupon bonds on the market with nine years to maturity. The bonds make semi-annual payments and currently sell for 103.17% of par. What is the current yield?
Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.
Answer
1 points
Question 14
A firm's bonds have maturity of 10 years with a $1000 face value, an 8% semi-annual coupon, are callable in 5 years, at $1,050, and currently sells at a price of $1,100. What is the yield to call (YTC)?
Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.
Answer
1 points
Question 15
The 12.23 percent coupon bonds of the Peterson Co. are selling for $908.7. The bonds mature in 5 years and pay interest semi-annually. These bonds have current yield of _____ percent.
Enter your answer in percentages rounded off to two decimal points.
Answer
1 points
Question 16
The principal amount of a bond that is repaid at the end of term is called the par value or the:
Answer
discount amount
back-end amount
coupon rate
coupon
face value
1 points
Question 17
ABC has issued a bond with the following characteristics:
Par: $1,000; Time to maturity: 9 years; Coupon rate: 11%;
Assume semi-annual coupon payments. Calculate the price of this bond if the YTM is 11.56%
Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
Answer
1 points
Question 18
A bond which sells for less than the face value is called a:
Answer
perpetuity.
par value bond.
discount bond.
debenture.
premium bond.
1 points
Question 19
A premium bond is a bond that:
Answer
has a par value which exceeds the face value.
has a face value in excess of $1,000.
has a market price which exceeds the face value.
is callable within 12 months or less.
is selling for less than par value.
1 points
Question 20
ABC wants to issue 11-year, zero coupon bonds that yield 11.96 percent. What price should they charge for these bonds if they have a par value of $1,000? That is, solve for PV. Assume annual compounding.
Hint: zero coupon bonds means PMT = 0
Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
Answer
1 points
Question 21
Assume that you wish to purchase a 10-year bond that has a maturity value of $1,000 and a coupon interest rate of 5%, paid semiannually. If you require a 4.05% rate of return on this investment (YTM), what is the maximum price that you should be willing to pay for this bond? That is, solve for PV.
Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
Answer
1 points
Question 22
ABC has issued a bond with the following characteristics:
Par: $1,000; Time to maturity: 18 years; Coupon rate: 6%;
Assume annual coupon payments. Calculate the price of this bond if the YTM is 7.82%
Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
- 10 years ago
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