FIN 431Chapter 10 quiz solutions

# FIN 431Chapter 10 quiz solutions - YourResults:

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Your Results: The correct answer for each question is indicated by a  1 INCORRECT A 20-year maturity bond with par value \$1,000 makes semiannual  payments at a coupon rate of 8%. The yield to maturity is 9%. How  much should you pay for this bond? A) \$1,080 B) \$1,000 C) \$966 D) \$908 2 INCORRECT A bond with a par value of \$1,000 has a 6% annual coupon rate.  Interest is paid semiannually and the price of the bond is \$1,025. What  is the current yield? A) 3.0% B) 2.9% C) 6.2% D) 5.9% 3 INCORRECT A semiannual coupon bond is currently selling for \$1,142.12. The bond  has a maturity of 10 years, a par value of \$1,000 and a 9% coupon  rate. What is the yield to maturity? A) 3.5% B) 7.0% C) 7.5% D) 9.0% 4 INCORRECT A coupon bond paying semiannual interest is reported as having an  ask price of 113% of its \$1,000 par value. If the last interest payment  was made two months ago and the coupon rate is 5%, what is the

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invoice price of the bond? A) \$1,113.52 B) \$1,146.48 C) \$1,121.76 D) \$1,138.24 5 INCORRECT A 15-year maturity zero-coupon bond has a yield to maturity of 4% and
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## This note was uploaded on 02/29/2012 for the course BUSINESS 100 taught by Professor Allprofessor during the Spring '12 term at Virginia College.

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FIN 431Chapter 10 quiz solutions - YourResults:

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