1. Assume that you purchase a $1,000 corporate bond that pays 8.25 percent interest. What is the dollar amount of interest that you receive each year?

2. What is the approximate market value of a $1,000 corporate bond that pays 6 percent interest when comparable bonds are paying 8 percent interest?

3. If the approximate market value for of a $1,000 corporate bond is $1,200 and it pays 6 percent interest, then what are comparable bonds paying?

4. Calculate the annual interest and the semiannual interest payment for the following corporate bond issues with a face value of $1,000. (Round your answers to 2 decimal places.)

5. Sandra Waterman purchased a 52-week, $4,800 T-bill issued by the U.S. Treasury.The purchase price was $4,781.

(a) What is the amount of the discount?

(b) What is the amount Ms. Waterman will receive when the T-bill matures?

(c) What is the current yield for the 52-week T-bill at the time of purchase? (Enter your answer as a percent rounded to 2 decimal places.)

Answer rating: 100% (QA)

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