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**Unformatted text preview: **Irrraquuuuu. ‘pta Irusruu ‘u pt: Assume that lﬁcrosoft bonds have just left the printer and have a stated coupon of $ 100 [a coupon rate of 10%) and a yield-to - maturity of 15%. The bonds mature in three years and the next coupon is due in one year. What is the fair pricr
today? On $956.52
00. $918.0
0:. $1000
["10 $832.39
Th'r5 Question: 2 ptE Investors ‘L‘i'hﬂ purchase bonds at a discount “ill: (Select the best choice helom’-) 1;." Receive lovs'er coupon payrnents than from those honcls sold at face “LT 1i] ["1
0] Earn a capital gain if the? hold the bond to Inatln'it'y'- ' .| I2: _Jc:_ Be able to sell the hon-:1 at a prenﬁtu‘n ifinterest rates rise above, their I: I: l .| r-D_ Fare 'ﬁ'DfEE than those investors ii'ho bought the sarne bond at a prerni' llisQrestloo: lots llislest: 20 do With relelitylorls. olelnesnise norolyisuhglnls to 111111 lie royalties inhaler oltle music are uselopylterot nlprinipalortlelnlt hlprl olllll. Ell rnouolthtlltolelto seruirire itslarlutalo hlpoltleliarltollolnl. Elllllll'li lEEllEllllllllalllpllllllt ll 05% airlrnllnrtue o11l1is lay ll years lonror. lhylellnthlnlisnisurnlyllll. ltrrhtprioslulllislnlrrletolry.rsuirgrlronlo
anuloupnl Consider a 6-year corporate bond issued by Vandelay [ndustries The bond has a face value of $1.000. and has an annual coupon rate of 6.8%. The yield to maturity of the bond is 8.2%. What is the fair price fo: @lA. $935.6?
OB. $961.29
01:. $1ooo.92 00. $623.21 ||||'.'1 QIIEELIUIIi £|JLI ||||'.'1 IEHLi LU |JL: loo lllpllllllllllllllllllt ol lllll nlnrlrolrlyert l11=15111511q11l1 all 091 roulronnlloeloltlllrt slorllleh Ell This Question: 2 pts If the nominal rate of interest is 12.53% and the real rate of interest is 3.22% what is the This Question: 2 pts This lost: EU pts lllcat is the percentage chatgeinpnce lonazeco coupon bond if the yield changes Eton 6.5% to 5.5%? Ilse bond has a lacecalue of $1.011] and it natuesin lﬂceacs. use the price cletecnunecl Eton the ﬁrst yield 6.5%. as the baseintl
calculation. This Question: 2 pt; ThisTest: 20 pts Jerry just purchased a bond paying semiannual interest for a price UNLOCK]. Yields on bonds of similar risk are 10.3%. Ihe bond has a face value of $1.000. Based on this information the coupon (Select 1'. e best choice below.) 1:. e coupon rate of the bond is 9.?% t 1E. e coupon rate ofthe bond is 11% EHJC. e coupon rate ofthe bond is 9.5% @D. e coupon rate ofthe bond is 10.3%.
This Question: 2 pts ThisTest: 20 pts Alorcl Motor Co. couponlsond has a coupon rate of 6.15% and pass annual coupons. The next coupon is clue tonnonou' and the boncl matue529 tears from common. Thesielcl on the honcl issue is 6.2%. At what price should this but
asng a face value of $1000? The price of the bond todas' should be 1. [Round to the nearest cent.) r
I hi5— ll:_:I-u Ila-Eticln: 2 p125 "'i..'='F.-:'__I:—_I_-I_"I:]:1 I:I-:E" 1:1:1IE: fcrﬂD—‘a-‘a'ﬂlg i5. [:3 ale :1: 111-3. hE-Et ChlﬂiCE 1:I—Ie I: :I_."—“-__ ma- FI-I—iIZE: Crf 111-2: 1:---:
:- E!_ Til-E: coup-D11 -:---:- t:_ The: :CI-uIII-ﬂﬂ ﬂat-3:5. ...

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- Spring '11
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