[i]. An 8 percent annual coupon, noncallable bond

[i]. An 8 percent annual coupon, noncallable bond has ten years until it matures and a yield to maturity of 9.1 percent. What should be the price of a 10-year noncallable bond of equal risk which pays an 8 percent semiannual coupon? Assume both bonds have a par value of $1,000.

 

  1. $ 898.64

 

  1. $ 736.86

 

  1. $ 854.27

 

  1. $ 941.09

 

  1. $ 964.23

 

 

 

[ii]. Kennedy Gas Works has bonds which mature in 10 years, and have a face value of $1,000. The bonds have a 10 percent quarterly coupon (i.e., the nominal coupon rate is 10 percent). The bonds may be called in five years. The bonds have a nominal yield to maturity of 8 percent and a yield to call of 7.5 percent. What is the call price on the bonds?

 

  1. $ 379.27

 

  1. $1,025.00

 

  1. $1,048.34

 

  1. $1,036.77

 

  1. $1,136.78

 

 

[iii]. Hood Corporation recently issued 20-year bonds. The bonds have a coupon rate of 8 percent and pay interest semiannually. Also, the bonds are callable in 6 years at a call price equal to 115 percent of par value. The par value of the bonds is $1,000. If the yield to maturity is 7 percent, what is the yield to call?

 

  1. 8.33%

 

  1. 7.75%

 

  1. 9.89%

 

  1. 10.00%

 

  1. 7.00%

 

 

[iv]. A 12-year bond with a 10 percent semiannual coupon and a $1,000 par value has a nominal yield to maturity of 9 percent. The bond can be called in five years at a call price of $1,050. What is the bond’s nominal yield to call?

 

  1. 4.50%

 

  1. 8.25%

 

  1. 8.88%

 

  1. 8.98%

 

  1. 9.00%

 

 

 

[v]. A corporate bond with an 11 percent semiannual coupon has a yield to maturity of 9 percent. The bond matures in 20 years but is callable in ten years. The maturity value is $1,000. The call price is $1,055. What is the bond’s yield to call?

 

  1. 8.43%

 

  1. 8.50%

 

  1. 8.58%

 

  1. 8.65%

 

  1. 9.00%

 

 

 

[vi]. A corporate bond which matures in 12 years, pays a 9 percent annual coupon, has a face value of $1,000, and a yield to maturity of 7.5 percent. The bond can first be called four years from now. The call price is $1,050. What is the bond’s yield to call?

 

  1. 6.73%

 

  1. 7.10%

 

  1. 7.50%

 

  1. 11.86%

 

  1. 13.45%

 

 

[vii]. A bond that matures in 11 years has an annual coupon rate of 8 percent with interest paid annually. The bond’s face value is $1,000 and its yield to maturity is 7.5 percent. The bond can be called 3 years from now at a price of $1,060. What is the bond’s nominal yield to call?

 

  1. 9.82%

 

  1. 8.41%

 

  1. 8.54%

 

  1. 8.38%

 

  1. 7.86%

 

 

 

 

 

[viii]. McGriff Motors has bonds outstanding which will mature in 12 years. The bonds pay a 12 percent semiannual coupon and have a face value of $1,000 (i.e., the bonds pay a $60 coupon every six months). The bonds currently have a yield to maturity of 10 percent. The bonds are callable in 8 years and have a call price of $1,050. What are the bonds’ yield to call?

 

  1. 8.89%

 

  1. 9.89%

 

  1. 9.94%

 

  1. 10.00%

 

  1. 12.00%

 

 

[ix]. A company is issuing $1,000 bonds at par value. The coupon rate (and yield to maturity) on the bonds is 8 percent (with annual payments) and the bonds will mature in 10 years. The bonds can be called at a call premium of 5 percent above face value after 3 years. What is the after-tax yield to call for an investor with a 31 percent tax rate?

 

  1. 5.52%

 

  1. 5.90%

 

  1. 6.60%

 

  1. 7.07%

 

  1. 9.52%

 

 

[x]. A 15-year bond with a 10 percent semiannual coupon has a par value of $1,000. The bond may be called after 10 years at a call price of $1,050. The bond has a nominal yield to call of 6.5 percent. What is the bond’s yield to maturity, stated on a nominal, or annual basis?

 

  1. 5.97%

 

  1. 6.30%

 

  1. 6.75%

 

  1. 6.95%

 

  1. 7.10%

 

[xi]. You have just been offered a $1,000 par value bond for $847.88. The coupon rate is 8 percent, payable annually, and annual interest rates on new issues of the same degree of risk are 10 percent. You want to know how many more interest pay­ments you will receive, but the party selling the bond cannot remember. Can you determine how many interest payments remain?

 

  1. 14

 

  1. 15

 

  1. 12

 

  1. 20

 

  1. 10

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