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1. Two years ago, Trans-Atlantic Airlines sold $250 million worth of bonds at $1,000 each. These semi-annual bonds had a maturity of 12 years and a coupon rate of 12.5%. Today these bonds are selling for $1,000. Determine the yield-to-maturity.

A. 13.24%

B. 5.59%

C. 13.72%

D. 10.84%

2. A semi-annual pay bond is on the market with 10.5 years to maturity, YTM of 8% and a current price of $1,075. What must be the bond’s coupon rate?

A. 8.53%

B. 9.07%

C. 9.34%

D. 8.78%

Financial Management, Finance

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