1. On the secondary market, bonds are trading at $925. The bonds have a 2.83% coupon rate paid semiannually and mature in three years. What is the yield to maturity (expressed at an annual rate) for the bonds if an investor buys them at the $925 market price?

This bond has a yield-to-maturity rate of 8.55% and a current yield of 2.83%.

This bond has a yield-to-maturity rate of 3.21% and a current yield of 2.83%.

This bond has a yield-to-maturity rate of 5.58% and a current yield of 3.06%.

This bond has a yield-to-maturity rate of 2.79% and a current yield of 3.06%.

2. On the secondary market, bonds are trading at $1105. The bonds have a 3.75% coupon rate paid annually and mature in five years. What is the yield to maturity (expressed at an annual rate) for the bonds if an investor buys them at the $1105 market price, and what is the current yield?

This bond has a yield-to-maturity rate of 1.55% and a current yield of 3.39%.

This bond has a yield-to-maturity rate of 1.38% and a current yield of 3.75%.

This bond has a yield-to-maturity rate of 1.55% and a current yield of 3.75%.

This bond has a yield-to-maturity rate of 5.63% and a current yield of 3.39%.