Finance Week 10 Assignment

Question 11.ABC Inc., has $1,000 face value bonds outstanding. These bonds mature in 3 years, and have a 6.5 percent coupon.The current price is quoted at 98.59 percent of par value. Assume semi-annual payments. What is the yield tomaturity?Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if youranswer is 0.12345 then enter as 12.35 in the answer box.Answer1 pointsQuestion 21.ABC’s Inc.’s bonds currently sell for $1,280 and have a par value of $1,000. They pay a $135annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,050. What istheir yield to call (YTC)?Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if youranswer is 0.12345 then enter as 12.35 in the answer box.Answer1 pointsQuestion 31.ABC has issued a bond with the following characteristics:Par: $1,000; Time to maturity: 16 years; Coupon rate: 5%;Assume annual coupon payments. Calculate the price of this bond if the YTM is 5.96%Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. Forexample, if your answer is $12.345 then enter as 12.35 in the answer box.Answer1 pointsQuestion 41.Stealers Wheel Software has 10.5% coupon bonds on the market with nine years to maturity. The bonds make semiannual payments and currently sell for 1,084% of par. What is the current yield?Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if youranswer is 0.12345 then enter as 12.35 in the answer box.Answer1 pointsQuestion 51.The principal amount of a bond that is repaid at the end of term is called the par value or the:Answerface valuecoupon ratediscount amountback-end amountcoupon1 pointsQuestion 61.A premium bond is a bond that:Answerhas a market price which exceeds the face value.has a par value which exceeds the face value.is selling for less than par value.has a face value in excess of $1,000.is callable within 12 months or less.1 pointsQuestion 71.The 12.1 percent coupon bonds of the Peterson Co. are selling for 837.03 percent of par value. The bonds mature in5 years and pay interest semi-annually. These bonds have current yield of _____ percent.Answer1 pointsQuestion 81.ABC has issued a bond with the following characteristics:Par: $1,000; Time to maturity: 13 years; Coupon rate: 8%;Assume semi-annual coupon payments. Calculate the price of this bond if the YTM is 10.99%Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. Forexample, if your answer is $12.345 then enter as 12.35 in the answer box.Answer1 pointsQuestion 91.The 8 percent coupon bonds of the Peterson Co. are selling for 98 percent of par value. The bonds mature in 5 yearsand pay interest semi-annually. These bonds have a yield to maturity of _____ percent.Answer1 pointsQuestion 101.The yield to maturity on a Marshall Co. premium bond is 7.6 percent. This is the:Answernominal rate.effective rate.real rate.current yield.coupon rate.1 pointsQuestion 111.Assume that you wish to purchase a 14-year bond that has a maturity value of $1,000 and a coupon interest rate of5%, paid semiannually. If you require a 5.77% rate of return on this investment (YTM), what is the maximum pricethat you should be willing to pay for this bond? That is, solve for PV.Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. Forexample, if your answer is $12.345 then enter as 12.35 in the answer box.Answer1 pointsQuestion 121.ABC wants to issue 11-year, zero coupon bonds that yield 11.96 percent. What price should they charge for thesebonds if they have a par value of $1,000? That is, solve for PV. Assume annual compounding.Hint: zero coupon bonds means PMT = 0Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. Forexample, if your answer is $12.345 then enter as 12.35 in the answer box.Answer1 pointsQuestion 131.The rate required in the market on a bond is called the:Answerrisk premiumyield to maturitycurrent yieldcall yieldliquidity premium1 pointsQuestion 141.A discount bond has a yield to maturity that:Answerexceeds the coupon rate.equals zero.is equal to the current yield.is less than the coupon rate.equals the bond’s coupon rate.1 pointsQuestion 151.ABC has issued a bond with the following characteristics:Par: $1,000; Time to maturity: 9 years; Coupon rate: 5%;Assume semi-annual coupon payments. Calculate the price of this bond if the YTM is 7.15%Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. Forexample, if your answer is $12.345 then enter as 12.35 in the answer box.Answer1 pointsQuestion 161.ABC Corp. issued 15-year bonds 2 years ago at a coupon rate of 10.6%. The bonds make semi-annual payments. Ifthese bonds currently sell for 97% of par value, what is the YTM?Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if youranswer is 0.12345 then enter as 12.35 in the answer box.Answer1 pointsQuestion 171.A firm’s bonds have maturity of 10 years with a $1000 face value, an 8% semi-annual coupon, are callable in 5years, at $1,050, and currently sells at a price of $1,100. What is the yield to call (YTC)?Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if youranswer is 0.12345 then enter as 12.35 in the answer box.Answer1 pointsQuestion 181.The 12.5 percent, $1,000 face value bonds of Tim McKnight, Inc., are currently selling at $1,037.95. What is thecurrent yield?Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if youranswer is 0.12345 then enter as 12.35 in the answer box.Answer1 pointsQuestion 191.BCDs $1,000 par value bonds currently sell for $798.40. The coupon rate is 10%, paid semi-annually. If the bondshave 5 years to maturity, what is the yield to maturity?Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if youranswer is 0.12345 then enter as 12.35 in the answer box.Answer1 pointsQuestion 201.You paid $860 for a corporate bond that has a 5.97% coupon rate. What is the current yield?Hint: if nothing is mentioned, then assume par value = $1,000Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if youranswer is 0.12345 then enter as 12.35 in the answer box.Answer1 pointsQuestion 211.A bond which sells for less than the face value is called a:Answerpremium bond.perpetuity.par value bond.discount bond.debenture.1 pointsQuestion 221.ABC’s bonds have a 9.5 percent coupon and pay interest semi-annually. Currently, the bonds are quoted at 106.315percent of par value. The bonds mature in 8 years. What is the yield to maturity?