5. A 12-year bond that has a 12 percent coupon rate is currently selling for $1,000, which equals the bond's face value. If interest is paid semiannually, the bond's yield to maturity is (Points : 1)
equal to 12 percent.
greater than 12 percent.
less than 12 percent.
More information is needed to answer this question.
None of the above is correct.
10. If interest rates fall from 8 percent to 7 percent, which of the following bonds will have the largest percentage increase in its value? (Points : 1)
A 10-year zero-coupon bond.
A 10-year bond with a 10 percent semiannual coupon.
A 10-year bond with a 10 percent annual coupon.
A 5-year zero-coupon bond.
A 5-year bond with a 12 percent annual coupon
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