Use the following information for questions 1-5. Alpha Bonds have a coupon rate of 7% with semiannual coupon payments, a face value of $1,000, and 6 years to go until maturity. Beta Bonds have a coupon rate of 10% with semiannual interest payments, a face value of $1,000, and 12 years to go until maturity. However, they can be called in 5 years for a call premium of $1,040. Gamma Bonds have a coupon rate of 12% with semiannual interest payments, a face value of $1,000,and 20 years to go until maturity. However, they can be called in 8 years for a call premium of $1,020.

1. If the Alpha bonds have a YTM of 8%, then how much are they worth?

     a) $928            b) $953                        c) $984                        d) $1,023

2. If the Gamma Bonds have a price of $950, then what is the relevant yield?

     a) 6.3%            b) 8.5%                        c) 9.7%                        d) 12.7%

3. If the Beta bonds have a price of $1,070, then what is the relevant yield?

     a) 8.5%            b) 8.75%            c) 8.9%                        d) 9%

4. If the Alpha bonds have a current yield of 9%, then how much are they worth?

     a) $778            b) $847                        c) $963                        d) $1,090

5. If the Gamma bonds have a yield to call of 10%, then how much are they worth?

     a) $952            b) $1,076            c) $1,118            d) $1,233