1. Wine and Roses, Inc. offers a 6.0 percent coupon bond with semi annual payments and a yield to maturity of 6.91 percent. The bonds mature in 12 years. What is the market price of a $1,000 face value bond?

$1,410.62

$1,442.55

$926.59

$1,023.89

$1,484.04

2. The Lo Sun Corporation offers a 6.0 percent bond with a current market price of $788.50. The yield to maturity is 8.40 percent. The face value is $1,000. Interest is paid semi annually. How many years is it until this bond matures?

31.44 years

26.28 years

16.38 years

8.19 years

32.77 years

3. A bond that pays interest annually yields a rate of return of 6.75 percent. The inflation rate for the same period is 2 percent. What is the real rate of return on this bond?

2.00 percent

4.66 percent

8.75 percent

3.38 percent

1.05 percent