MI has a $1,000 par value, 30-year bond outstanding that was issued 20 years ago at an annual coupon rate of 10%, paid semiannually. Market interest rates on similar bonds are 7%. Calculate the bond's price.
A) $956.42
B) $1,000.00
C) $1,168.31
D) $1,213.19
Davis & Davis issued $1,000 par value bonds at 102. The bonds pay 12% interest annually and mature in 30 years. The market rate of interest is (round to the nearest hundredth of a percent)
A) 12.00%.
B) 11.71%.
C) 10.12%.
D) 11.29%.
What is the yield to maturity of a nine-year bond that pays a coupon rate of 20% per year, has a $1,000 par value, and is currently priced at $1,407? Assume annual coupon payments.
A) 21.81%
B) 6.14%
C) 12.28%
D) 11.43%
What is the expected rate of return on a bond that matures in seven years, has a par value of $1,000, a coupon rate of 14%, and is currently selling for $911? Assume annual coupon payments.
A) 7.81%
B) 15.36%
C) 15.61%
D) 16.22%
What is the expected rate of return on a bond that pays a coupon rate of 9% paid semi-annually, has a par value of $1,000, matures in five years, and is currently selling for $1071?
A) 7.28%
B) 8.40%
C) 3.64%
D) 4.21%
What is the value of a bond that has a par value of $1,000, a coupon rate of $80 (annually), and matures in 11 years? Assume a required rate of return of 11%, and round your answer to the nearest $10.
A) $320.66
B) $1,011.00
C) $813.80
D) $790.79
What is the value of a bond that matures in three years, has an annual coupon payment of $110, and a par value of $1,000? Assume a required rate of return of 11%, and round your answer to the nearest $10.
A) $970
B) $1,330
C) $330
D) $1,000
Bond ratings directly affect a bond's
A) spread over the Treasury yield.
B) coupon rate.
C) maturity date.
D) call provisions.
The discount rate used to value a bond is
A) the coupon interest rate.
B) determined by the issuing company.
C) fixed for the life of the bond.
D) the market rate of interest.
