Chapter 4 Valuing Bonds Chemistry Worksheet With Answers Page 3
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21PV: 1124.62
DIF: E
REF: 4.2 Bond Prices and Interest Rates
10. Bavarian Sausage just issued a 10 year 12% coupon bond. The face value of the bond is $1,000 and the
bond makes annual coupon payments. If the bond is trading at $967.25, what is the bond’s yield to
maturity?
a. 12.00%
b. 12.59%
c. 11.26%
d. 13.27%
ANS: B
FV: 1000
PV: 967.25
PMT: 120
N: 10
I/Y: 12.59
DIF: E
REF: 4.2 Bond Prices and Interest Rates
11. Bavarian Sausage just issued a 10 year 12% coupon bond. The face value of the bond is $1,000 and the
bond makes semiannual coupon payments. If the bond is trading at $867.25, what is the bond’s yield
to maturity?
a. 12.00%
b. 12.37%
c. 14.56%
d. 10.86%
ANS: C
FV: 1000
PV: 867.25
PMT: 120/2
N: 10*2
I/Y : 7.28
yield to maturity: 2*7.28 = 14.56
DIF: E
REF: 4.2 Bond Prices and Interest Rates
12. Bavarian Sausage just issued a 10 year 12% coupon bond. The face value of the bond is $1,000 and the
bond makes semiannual coupon payments. If the bond is trading at $1,267.25, what is the bond’s yield
to maturity?
a. 12.00%
b. 8.06%
c. 14.38%
d. 10.97%
ANS: B
FV: 1000
PV: 1267.25
PMT: 120
N: 10
I/Y: 8.06
DIF: E
REF: 4.2 Bond Prices and Interest Rates
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