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.

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