Use this table for the next three questions:
Bond #
Par Value
Coupon Rate
Years to Maturity
Yield to Maturity
Coupons
Price
1
$1,000.00
8%
10
6%
Semiannual
?
2
$5,000.00
9%
20
7%
Quarterly
?
3
$5,000.00
12%
30
5%
Monthly
?
What is the price of bond #1?
Question 1 options:
1148.770
1014.268
1031.717
1230.103
1207.553
What is the price of bond #2?
Question 2 options:
6697
6072
6839
6591
4965
What is the price of bond #3?
Question 3 options:
11,849.42
10,433.21
8,605.40
9,871.98
10,885.90
Bond #
Par Value
Coupon Rate
Years to Maturity
Yield to Maturity
Coupons
Price
1
$1,000.00
8%
10
?
Semiannual
$1000.00
2
$1,000.00
6%
10
?
Quarterly
$850.00
3
$5,000.00
9%
20
?
Monthly
$5,400.00
What is the yield to maturity of bond #1?
Question 4 options:
6%
7%
10%
9%
8%
What is the yield to maturity of bond #2?
Question 5 options:
8.432
8.758
9.774
9.125
8.214
What is the yield to maturity of bond #3?
Question 6 options:
8.730
7.204
8.375
8.186
7.895
Par Value
Coupon Rate
Years to Maturity
Yield to Maturity
Price
Coupon
Frequency
1
$5,000.00
9%
?
8.1838%
$5,400.00
Quarterly
2
$5,000.00
12%
?
16.0938%
$4,300.00
Monthly
Calculate the years to maturity for bond #1.
Question 7 options:
84.3002
90.3614
71.2421
79.9969
75.9975
Calculate the months to maturity for bond #2.
Question 8 options:
67
62
60
65
64
Par Value
Coupon Rate
Years to Maturity
Yield to Maturity
Price
Coupon
Frequency
1
$1,000.00
?
20
9.0%
$907.63
Quarterly
2
$1,000.00
?
10
8.0%
$862.63
Monthly
Calculate the coupon rate for bond #1.
Question 9 options:
9.5%
10%
9%
8%
8.5%
Calculate the coupon rate for bond #2.
Question 10 options:
6.5%
7.5%
6%
5.5%
7.0%
Moore Company is about to issue a bond with semiannual coupon payments, a coupon rate of 8%, and par value of $1,000. The yield to maturity for this bond is 10%. What is the price of the bond if the bond matures in five years?
Question 11 options:
967.41
949.64
895.29
922.78
950.27
Moore Company is about to issue a bond with semiannual coupon payments, a coupon rate of 8%, and par value of $1,000. The yield to maturity for this bond is 10%. What is the price of the bond if the bond matures in twenty years?
Question 12 options:
828.41
817.03
837.99
670.17
911.67
Wesley Company will issue a zero-coupon bond this coming month. The projected yield for the bond is 5%. If the par value of the bond is $1,000, what is the bonds price using a semiannual convention if the bond matures in 20 years?
Question 13 options:
383.12
427.64
402.69
407.73
372.43
Wesley Company will issue a zero-coupon bond this coming month. The projected yield for the bond is 5%. If the par value of the bond is $1,000, what is the bonds price using a semiannual convention if the bond matures in 30 years?
Question 14 options:
234.56
217.18
238.95
227.28
205.13
Corso Books has just sold a callable bond. The bond is a thirty-year semiannual bond with a coupon rate of 6%. Investors, however, can call the bond starting at the end of ten years. If the yield to call on this bond is 8% and the call requires Corso Books to pay one year of additional interest at the call (two coupon payments), what is the bond price if priced with the assumption that it will be called on the first available call date?(Assume $1,000 par value)
Question 15 options:
816.28
804.21
870.76
891.48
858.82
McCarty Manufacturing Company makes baseball equipment. The company decides to issue a callable bond that it expects to sell for $840 per bond. If the bond is a twenty-year semiannual bond with a 6% coupon rate and a current yield to maturity of 7%, what is the cost of the option attached to the bond? (Assume $1,000 par value). Hint: find the price of an equivalent bond without the call option.
Question 16 options:
47.77
56.95
53.22
49.97
52.41
Today is February 15, 2008
Type
Issue Date
Price
Coupon Rate
Maturity Date
YTM
Current Yield
Rating
Note
Feb 2000
6.50%
2-15-2010
3.952%
6.199%
AAA
Bond
Aug 2005
100.00
4.25%
8-15-2018
4.250%
AAA
Bond
Aug 2003
7.25%
8-15-2023
4.830%
5.745%
AAA
Bond
Feb 1995
126.19
8.50%
2-15-2015
6.736%
AAA
What is the price of the August 2003 Treasury bond (assume a $100,000 par value) with the yield to maturity from the table? (Semi-annual coupons are paid).
Question 17 options:
130,648.5
138,560.9
113,239.9
126,192.5
110,264.5
Today is February 15, 2008
Type
Issue Date
Price
Coupon Rate
Maturity Date
YTM
Current Yield
Rating
Note
Feb 2000
6.50%
2-15-2010
3.952%
6.199%
AAA
Bond
Aug 2005
100.00
4.25%
8-15-2018
4.250%
AAA
Bond
Aug 2003
7.25%
8-15-2023
4.830%
5.745%
AAA
Bond
Feb 1995
126.19
8.50%
2-15-2015
6.736%
AAA
What is the yield to maturity of the February 1995 Treasury bond based on the price from the table? Semi-annual coupons are paid, bonds are $100 par value. NOTE: todays date is February 15, 2008.
Question 18 options:
4.15
3.89
4.47
4.32
3.66
Treasury bills. For the next 5 problems, use the information in the following table. A face value of $10,000 is assumed for the Treasury bill.
Maturity
Days to Maturity
Bank Discount
Mar 30
28
1.20
Apr 30
59
2.00
Jun 30
120
2.45
Aug 30
181
?
What is the price for the April 30 Treasury bill?
Question 19 options:
9,642.18
10,210.01
10,076.75
9,967.22
9,258.88
What is the price for the June 30 Treasury bill?
Question 20 options:
9,918.33
10,204.20
11,091.63
9,454.35
8,839.83
Determine the bank discount rate of the August 30 Treasury bill if it is currently selling for $9,841.625.
Question 21 options:
3.03%
3.15%
3.27%
2.71%
2.99%
What is the bond equivalent yield for the August 30 Treasury bill?
Question 22 options:
3.672%
3.245%
3.073%
3.325%
2.609%
What is the bond equivalent yield for the Jun 30 Treasury bill?
Question 23 options:
2.36%
2.62%
2.38%
2.71%
2.5%
