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Question 1

Diane Carter is interested in buying a 5 year zero coupon bond with a face value of $5,000. If the market interest rate on these types of bonds is currently 9 percent, what is the current price of this bond?

Question 2

Diane Carter is interested in buying a 5 year zero coupon bond with a face value of $5,000. If the current market value of the bond is $3,104.61, what is the bond's yield to maturity?  

Question 3

Rudy Sandberg wants to invest in 5 year bonds that are currently priced at $850.00. The bonds have a coupon rate of 10 percent and semiannual coupon payments. If the par value of the bonds is $1,000, what is the bond's effective annual yield (EAY)?

Question 4

You own a 5 year bond with a face value of $1,000 and a coupon rate of 5 percent with annual payments. The bond is currently worth $810.46. If market interest rates remain unchanged, what will be the value of the bond next year when there are 4 years left until maturity?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92072748

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