assignment 6

assignment 6 - 1 Stud ent Resp onse Valu e Corr ect wer Ans...

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The coupon rate of a bond equals:    Stud ent  Resp onse Valu e Corr ect  Ans wer Feed back A.  its  yield  to  matu rity.      B.  perc enta ge of  its  face  value . 100
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What happens when a bond's expected cash flows are discounted at a rate lower than the bond's  coupon rate?    Stud ent  Resp onse Valu e Corr ect  Ans wer Feed back A.  The  price  of  the  bond  incre ases. 100      B.  The  coup on  rate  of  the  bond
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How much should you pay for a \$1,000 bond with 10% coupon, annual payments, and five years to  maturity if the interest rate is 12%?    Stud ent  Resp onse Valu e Corr ect  Ans wer Feed back A.  927. 90 100      B.  981. 40      C.  \$1,0
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How much would an investor expect to pay for a \$1,000 par value bond with a 9% annual coupon that  matures in 5 years if the interest rate is 7%?    Stud ent  Resp onse Valu e Corr ect  Ans wer Feed back A.  \$696 .74      B.  \$1,0 75.8 2      C.  \$1,0 82.0 0
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Stud ent  Resp onse Valu e Corr ect  Ans wer Feed back A.  multi plyin g the  price  by  the  coup on  rate.
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This note was uploaded on 03/30/2010 for the course MGMT 310 taught by Professor Staff during the Spring '08 term at Purdue University Calumet.

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assignment 6 - 1 Stud ent Resp onse Valu e Corr ect wer Ans...

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