Bonds Self Test

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A MicroQuik bond carries a 8.5% annual coupon. The par value is $1000 and the bond matures in 9 years. If the bond currently sells for $1,031.23, what is its yield to maturity (YTM)?

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Answer

| a. | 8.0001% |

| c. | 8.1579% |

| d. | 8.5000% |

1 points   

Question 2

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Spry has an outstanding bond issue that is currently selling for $1,050.24. The yield to maturity is 5.9%, and the bonds mature in 10 years. Assuming that the face value is $1000 and the bonds pay a semi-annual coupon, what is the current yield on the bonds?

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Answer

| a. | 6.2579% |

| b. | 6.7103% |

| c. | 6.5711% |

1 points   

Question 3

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What is the annual coupon payment required for a $1000 par value bond with 29 years to maturity that sells for $1,298.35. Assume investors require a return of 5.9% on the bond.

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Answer

| a. | $80.7230 |

1 points   

Question 4

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A $1000 par value bond with 26 years to maturity sells for $1,233.51. Investors require a return of 8.8% on similar bonds. If the bond pays semi-annual coupon payments, what is the annual coupon rate on the bonds?

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Answer

| 1. | 12.2% |

| 2. | 11.1% |

| 4. | 13.3% |

1 points   

Question 5

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A $1000 par value bond will mature in 19 years. This bond pays a semi-annual...