FIN+3403+SPRING+2007+exam+3

FIN+3403+SPRING+2007+exam+3 - Exam FIN 3403 SPRING 2007...

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Exam _____ FIN 3403 SPRING 2007 EXAM 3 Name: ____________________________ Round percentages to 2 decimals (0.00%) and round dollar figures to the penny. Round all other answers to two decimal places. Write your answers in the left column next to the question. Keep your answers covered. The questions are worth 5 points each unless market otherwise. There are 125 possible points. 1. 5 POINTS: An investor has a required rate of return of 15%. What is the most that he will pay for a bond that matures in 9 years, has a par value of $1,000, and a coupon interest rate of 11% paid annually? 2. A 6% bond (coupon rate = 6%) has an 8% yield to maturity (YTM). It matures in 5 years and has a $1,000 face value. What is the price of the bond? 3. An 8% bond has a 6.5% yield to maturity (YTM). Is this a discount, par, or premium bond? 4. A 5% bond is currently selling for $750. It matures in 8 years and has a par value of $1,000. What is its YTM? 5. Find the value of a bond maturing in 9 years with a $1,000 par value and a coupon interest rate of 14% per year if the required return on similar-risk bonds is 18% per year. The bond pays quarterly coupons. 6.
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This note was uploaded on 02/09/2012 for the course MGT 3078 taught by Professor Marchman during the Spring '12 term at Georgia Tech.

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FIN+3403+SPRING+2007+exam+3 - Exam FIN 3403 SPRING 2007...

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