Q:1-WeOweEveryone, Inc. has a 12 year bond outstanding that has 9.5% coupon rate. If the appropriate discount rate for such a bond is 7%, what the the appropriate price for the semi-annual coupon paying bond?
Mark one answer:
$1,200.73
$1,198.57
$1,000.00
$762.77

Q:6-Fence Place Diary Company (FPD) has a 15-year maturity bond outstanding that is currently convertible into 50 shares of FPD common stock. FPD common stock currently sells for $25 a share and the coupon rate (semi-annual coupons) for the bond is 5%. If the yield on a similarly rated convertible bond (on The New York Calendar Corp.) is 5%, then what should be the correct price of the FPD convertible bond?
Mark one answer:
$750.00
$1,000
$1,250
either A or B

Q:7-You own a bond that pays a 12% annualized semi-annual coupon rate. The bond has 10 years to maturity. If the discount rate suddenly moves from 14% to 16%, then what is the dollar increase (decrease) in value for the bond?
Mark one answer:
($90.42)
($89.01)
$89.01
$90.42

Q:8-You own a bond that pays a 12% annualized semi-annual coupon rate and has 10 years to maturity. If the discount rate increases from 14% to 16% during the next two years of the bonds life, then what is the dollar increase (decrease) in value for the bond during the two year period?
Mark one answer:
($69.42)
($71.09)
$69.42
$71.09

Q:9-Tom Corp. has decided to do things differently with respect to their corporate bond issue. They have a bond outstanding that makes quarterly coupon payments instead of semi-annually. The stated coupon rate on the bond is 10% and the yield to maturity on the 5-year bond is 12%. What is the price of the bond?
Mark one answer:
$927.90
$926.40
$925.61
none of the above

Q:10-A bond pays an annual coupon rate of 7% with a face value of $1,000. The bond is scheduled to mature in two years and currently trades at $920.00. What is the coupon yield of the bond currently?
Mark one answer:
7.00%
7.61%
14.00%
15.22%