1. Eight years ago a Fortune 100 company issued a 30-year bond with an 8% coupon paid semi-annually and the current price is 94% of its face value. If interest rates move upward the price of this bond can be expected to ___________.

stay the same

increase

decrease

Not enough information to determine

2. Current Yield on a Bond. Assume Blue Chip Corporation's bonds currently sell for $1,100. They have a 6-year maturity, an annual coupon of $80, and a par value of $1000. What is the current yield or the yield in the next one year?

7.14%

7.27%

7.88%

8.27%

8.68%

3. Yield to Maturity. Assume that Tennis Galaxy bonds currently sell for $1,300, have a par value of $1000, a call value of $1,200, an annual coupon payment of $100. The bonds have a 15-year maturity, but can be called in 10 years at $1,200. What is the yield to maturity (YTM)?

6.63%

6.75%

7.14%

7.74%

8.12%

4. Yield to Call. Assume that Tennis Galaxy bonds currently sell for $1,300, have a par value of $1000, a call value of $1,200, an annual coupon payment of $100. The bonds have a 15-year maturity, but can be called in 10 years at $1,200. What is the yield to call (YTC)?

6.63%

6.75%

7.14%

7.74%

8.12%

5. YTM. In this case, assume Golf Galore's non-callable bonds currently sell for $1,500. They have a 12-year maturity, an annual coupon of $75, and a par value of $1,000 (reminder: the par value is $1000 unless stated otherwise). What is their annual yield to maturity or YTM?

2.59%

5.02%

5.96%

6.25%

7.17%