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

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
1.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
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   
Background image of page 2
2.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
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 
Background image of page 4
3.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
  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
Background image of page 6
4.
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
  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
Background image of page 8
5.
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
  Stud ent  Resp onse Valu e Corr ect  Ans wer Feed back A.  multi plyin g the  price  by  the  coup on  rate.   
Background image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

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.

Page1 / 41

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

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online