1-Consider a zero-coupon bond with a $1000 face value and 10
years left until maturity. If the YTM of this bond is 10.4%, then
the price of this bond is closest to:
$1000
$602
$1040
$372
2-Use the following information to answer the question(s)
below. Suppose the current zero-coupon yield curve for risk-free
bonds is as follows: The price per $100 face value of a three-year,
zero-coupon, risk-free bond is closest to:
$93.80
$90.06
$89.1
$86.39
3-Use the information for the question(s) below. The
Sisyphean Company has a bond outstanding with a face value of $1000
that reaches maturity in 15 years. The bond certificate indicates
that the stated coupon rate for this bond is 8% and that the coupon
payments are to be made semiannually. How much will each semiannual
coupon payment be?
Answer
$60
$40
$120
$80
4-Consider the following investment alternatives:
Investment
compounding
A
6.25% annually
B-
6.10% daily
C-
6.125
quarterly
D-
6.120
monthly
1-Which alternative offers you the lowest effective rate of
return?
Investment A
Investment B
Investment C
Investment D
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