FINHW#4

# FINHW#4 - Periodic receipts of interest by the bondholder...

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Periodic receipts of interest by the bondholder are known as: the coupon rate. a zero-coupon. coupon payments. the default premium

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How much should you pay for a \$1,000 face value bond with 10% coupon, annual payments, and five years to maturity if the interest rate (or bond yield or yield to maturity) is 12%? Feedback:  \$ 927.90 \$ 981.40 \$1,000.00 \$1,075.82 What is the "Current Yield" as opposed to the bond's yield to maturity of a bond with a 6% coupon, four years until maturity, and a price of \$750? Feedback: pp.118-119  , 60/750=8% The discount rate that makes the present value of a bond's payments equal to its price is termed the: What is the yield to maturity for a bond paying \$100 annually that has six years until maturity and sells for \$1,000? Assume par = \$1,000. . N=6, PMT=100, FV=1000, PV=-1000, CPT I/Y=10
How much should you pay for a \$1,000 face value bond with 10% coupon, annual payments, and five years to maturity if the interest rate (or bond yield or yield to maturity) is 12%? Feedback:

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## This note was uploaded on 05/02/2011 for the course FIN 3400 taught by Professor Ll during the Spring '09 term at CSU East Bay.

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FINHW#4 - Periodic receipts of interest by the bondholder...

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