finance questions

Use this table for the next three questions:

Bond #	Par Value	Coupon Rate	Years to Maturity	Yield to Maturity	Coupons	Price
1	$1,000.00	8%	10	6%	Semiannual	?
2	$5,000.00	9%	20	7%	Quarterly	?
3	$5,000.00	12%	30	5%	Monthly	?

What is the price of bond #1?

Question 1 options:

	1148.770
	1014.268
	1031.717
	1230.103
	1207.553

What is the price of bond #2?

Question 2 options:

	6697
	6072
	6839
	6591
	4965

What is the price of bond #3?

Question 3 options:

	11,849.42
	10,433.21
	8,605.40
	9,871.98
	10,885.90

Bond #	Par Value	Coupon Rate	Years to Maturity	Yield to Maturity	Coupons	Price
1	$1,000.00	8%	10	?	Semiannual	$1000.00
2	$1,000.00	6%	10	?	Quarterly	$850.00
3	$5,000.00	9%	20	?	Monthly	$5,400.00

What is the yield to maturity of bond #1?

Question 4 options:

	6%
	7%
	10%
	9%
	8%

What is the yield to maturity of bond #2?

Question 5 options:

	8.432
	8.758
	9.774
	9.125
	8.214

What is the yield to maturity of bond #3?

Question 6 options:

	8.730
	7.204
	8.375
	8.186
	7.895

Par Value

Coupon Rate

Years to Maturity

Yield to Maturity

Price

Coupon

Frequency

$5,000.00

8.1838%

$5,400.00

Quarterly

$5,000.00

12%

16.0938%

$4,300.00

Monthly

Calculate the years to maturity for bond #1.

Question 7 options:

	84.3002
	90.3614
	71.2421
	79.9969
	75.9975

Calculate the months to maturity for bond #2.

Question 8 options:

	67
	62
	60
	65
	64

Par Value

Coupon Rate

Years to Maturity

Yield to Maturity

Price

Coupon

Frequency

$1,000.00

9.0%

$907.63

Quarterly

$1,000.00

8.0%

$862.63

Monthly

Calculate the coupon rate for bond #1.

Question 9 options:

	9.5%
	10%
	9%
	8%
	8.5%

Calculate the coupon rate for bond #2.

Question 10 options:

	6.5%
	7.5%
	6%
	5.5%
	7.0%

Moore Company is about to issue a bond with semiannual coupon payments, a coupon rate of 8%, and par value of $1,000. The yield to maturity for this bond is 10%. What is the price of the bond if the bond matures in five years?

Question 11 options:

	967.41
	949.64
	895.29
	922.78
	950.27

Question 12 options:

	828.41
	817.03
	837.99
	670.17
	911.67

Wesley Company will issue a zero-coupon bond this coming month. The projected yield for the bond is 5%. If the par value of the bond is $1,000, what is the bond’s price using a semiannual convention if the bond matures in 20 years?

Question 13 options:

	383.12
	427.64
	402.69
	407.73
	372.43

Question 14 options:

	234.56
	217.18
	238.95
	227.28
	205.13

Corso Books has just sold a callable bond. The bond is a thirty-year semiannual bond with a coupon rate of 6%. Investors, however, can call the bond starting at the end of ten years. If the yield to call on this bond is 8% and the call requires Corso Books to pay one year of additional interest at the call (two coupon payments), what is the bond price if priced with the assumption that it will be called on the first available call date?(Assume $1,000 par value)

Question 15 options:

	816.28
	804.21
	870.76
	891.48
	858.82

McCarty Manufacturing Company makes baseball equipment. The company decides to issue a callable bond that it expects to sell for $840 per bond. If the bond is a twenty-year semiannual bond with a 6% coupon rate and a current yield to maturity of 7%, what is the cost of the option attached to the bond? (Assume $1,000 par value). Hint: find the price of an equivalent bond without the call option.

Question 16 options:

	47.77
	56.95
	53.22
	49.97
	52.41

Today is February 15, 2008

Type	Issue Date	Price	Coupon Rate	Maturity Date	YTM	Current Yield	Rating
Note	Feb 2000	—	6.50%	2-15-2010	3.952%	6.199%	AAA
Bond	Aug 2005	100.00	4.25%	8-15-2018	—	4.250%	AAA
Bond	Aug 2003	—	7.25%	8-15-2023	4.830%	5.745%	AAA
Bond	Feb 1995	126.19	8.50%	2-15-2015	—	6.736%	AAA

What is the price of the August 2003 Treasury bond (assume a $100,000 par value) with the yield to maturity from the table? (Semi-annual coupons are paid).

Question 17 options:

	130,648.5
	138,560.9
	113,239.9
	126,192.5
	110,264.5

Today is February 15, 2008

Type	Issue Date	Price	Coupon Rate	Maturity Date	YTM	Current Yield	Rating
Note	Feb 2000	—	6.50%	2-15-2010	3.952%	6.199%	AAA
Bond	Aug 2005	100.00	4.25%	8-15-2018	—	4.250%	AAA
Bond	Aug 2003	—	7.25%	8-15-2023	4.830%	5.745%	AAA
Bond	Feb 1995	126.19	8.50%	2-15-2015	—	6.736%	AAA

What is the yield to maturity of the February 1995 Treasury bond based on the price from the table? Semi-annual coupons are paid, bonds are $100 par value. NOTE: today’s date is February 15, 2008.

Question 18 options:

	4.15
	3.89
	4.47
	4.32
	3.66

Treasury bills. For the next 5 problems, use the information in the following table. A face value of $10,000 is assumed for the Treasury bill.

Maturity	Days to Maturity	Bank Discount
Mar 30	28	1.20
Apr 30	59	2.00
Jun 30	120	2.45
Aug 30	181	?

What is the price for the April 30 Treasury bill?

Question 19 options:

	9,642.18
	10,210.01
	10,076.75
	9,967.22
	9,258.88

What is the price for the June 30 Treasury bill?

Question 20 options:

	9,918.33
	10,204.20
	11,091.63
	9,454.35
	8,839.83

Determine the bank discount rate of the August 30Treasury billif it is currently selling for $9,841.625.

Question 21 options:

	3.03%
	3.15%
	3.27%
	2.71%
	2.99%

What is the bond equivalent yield for the August 30Treasury bill?

Question 22 options:

	3.672%
	3.245%
	3.073%
	3.325%
	2.609%

What is the bond equivalent yield for the Jun 30 Treasury bill?

Question 23 options:

	2.36%
	2.62%
	2.38%
	2.71%
	2.5%

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