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Unformatted text preview: a. 6.00%
b. 6.28%
c. 12.00%
d. 12.56%
Feedback:
Mode = End
FV = 1,000
N = 10X2 I = 8.93%/ 2
PMT = ? = 60
PV = 1,200
Coupon = (60X2)/1000 = 12%
6. As the market interest rate go up, what happened to the price of existing bonds?
a. Goes up
b. Goes down
c. Stays the same
d. Not enough information
Feedback:
Interest rate and price of a bond has an inverse relationship
7. If a bond currently sold at $949.47 with YTM of 12% and annual coupon rate of 11%
paid semiannually, in how many years does the bond mature?
a. 4 years
b. 6 years
c. 8 years
d. 10 years
e. None of the above
Feedback:
Mode = End
FV = 1,000
N = ? = 16
I = 12%/2
PMT = 1000*0.11/2
PV = 949.47
Since it is semiannual, 16/2 = 8
8. If the bond is currently sold at its premium, what is the relationship between YTM,
coupon rate, and current yield?
a. YTM = CY = Coupon
b. YTM < CY > Coupon
c. YTM < CY < Coupon
d. YTM > CY > Coupon
9. Suppose you pay $508 for a zerocoupon bond that had 10 years left to maturity.
Assuming annual compounding, what is your...
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This note was uploaded on 01/11/2014 for the course FIN 201 taught by Professor Pinegar during the Fall '13 term at BYU.
 Fall '13
 Pinegar
 Finance

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