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1) MCI has issued 7 1/4% coupon interest rate bond which matures in five years. If yield on other bonds of alike risk and maturity is 9%, find out the present value of bond? Assume coupon interest payments are paid annually.

1) about $282
2) about $650
3) about $932
4) about $1000

2) Bond matures in 12 years, and pays 8 percent annual coupon. Bond has face value of $1,000, and presently sells for $985. Find out the bond's present yield and yield to maturity?

i) Present yield = 8.00%; yield to maturity = 7.92%.
ii) Present yield = 8.12%; yield to maturity = 8.20%.
iii) Present yield = 8.20%; yield to maturity = 8.37%.
iv) Present yield = 8.12%; yield to maturity = 8.37%.
v) Present yield = 8.12%; yield to maturity = 7.92%.

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