1. Capital Corp. issued a 15-year bond 3 years ago at a coupon rate of 5.2 percent. The bonds make annual payments. If these bonds currently sell for 109 percent of par value, what is the approximate YTM?

a. 4.3 %

b. -0.7 %

c. 2.1 %

d. 13.7 %

e. 2.1 %

2. You purchase a bond with an invoice price ( i.e. dirty price) of $906 (Par value is $1,000). The bond has a coupon rate of 6.7 percent, and there are 2 months to the next semiannual coupon date. What is the clean price of the bond?

a. 883.67

b. 928.33

c. 865.77

d. 979.77