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Exam 6: Valuing Bonds

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Question 21

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Consider a corporate bond with a $1000 face value,8% coupon with semiannual coupon payments,7 years until maturity,and a YTM of 9%.It has been 57 days since the last coupon payment was made and there are 182 days in the current coupon period.The dirty (cash) price for this bond is closest to:

A) $949.70
B) $961.40
C) $936.40
D) $948.90

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Question 22

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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:

A) $1000
B) $602
C) $1040
D) $372

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Question 23

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Use the table for the question(s) below. Consider the following yields to maturity on various one-year zero-coupon securities: -The price (expressed as a percentage of the face value) of a one-year,zero-coupon corporate bond with a BBB rating is closest to:

Which of the following statements is FALSE?

Which of the following statements is FALSE?

According to Figure 6.5,the percent of countries in default or restructuring debt:

A three-month treasury bill sold for a price of $99.311998 per $100 face value.The yield to maturity of this bond expressed as an EAR is closest to:

Use the table for the question(s) below. Consider the following zero-coupon yields on default free securities: -The YTM of a 3 year default free security with a face value of $1000 and an annual coupon rate of 6% is closest to:

Assuming the appropriate YTM on the Sisyphean bond is 9.0%,then the price that this bond trades for will be closest to:

Use the following information to answer the question(s) below. -The credit spread on B-rated corporate bonds is:

Assuming the appropriate YTM on the Sisyphean bond is 9%,then this bond will trade at

A corporate bond which receives a BBB rating from Standard and Poor's is considered

Use the table for the question(s) below. The following table summarizes prices of various default-free zero-coupon bonds (expressed as a percentage of face value) : -The yield to maturity for the two year zero-coupon bond is closest to:

Use the table for the question(s) below. Consider the following zero-coupon yields on default free securities: -The price of a five-year,zero-coupon,default-free security with a face value of $1000 is closest to:

Which of the following statements is FALSE?

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 are each of the semiannual coupon payments? Assuming the appropriate YTM on the Sisyphean bond is 8.8%,then at what price should this bond trade for?

Use the table for the question(s) below. Consider the following zero-coupon yields on default free securities: -The forward rate for year 3 (the forward rate quoted today for an investment that begins in two years and matures in three years) is closest to:

The price today of a three-year default-free security with a face value of $1000 and an annual coupon rate of 4% is closest to:

Use the table for the question(s) below. Consider the following yields to maturity on various one-year zero-coupon securities: -The credit spread of the B corporate bond is closest to:

What is the relationship between a bond's price and its yield to maturity?