1. Consider an annual coupon bond with a face value of $100, 4 years tomaturity, and a price of $76. The coupon rate on the bond is 5%. If you can reinvest coupons at a rate of 5% perannum, then how much money do you have if you hold the bond tomaturity?

The total proceeds from holding the bond to maturity are $

2. Wee Beastie Animal Farm bonds have 7 years to maturity and pay an annual coupon at the rate of 5.9%. The face value of the bonds is $1,000. The price of the bonds is $1,039.62 to yield 5.21%. What is the capital gain yield on thebonds?

The capital gain yieldis:

A.0.41%

B. +0.46

C.0.43%

D.+0.53%

E. -0.47%

3. A 9-year bond pays interest of $28.70 semiannually, has a face value of $1,000, and is selling for $840.37. What are its annual coupon rate and yield tomaturity?

The annual coupon rate is %.

The yield to maturity is %.

4. Acme Inc. just issued a bond with a$10,000 face value and a coupon rate of7%. If the bond has a life of 30years, pays semiannual coupons, and the yield to maturity is9%, what will the bond sellfor?

A.$7,936.20

B.$7,945.27

C. $10,000

D.$4,349.49

E.$7,904.45

5. You have just purchased a 15year, $1,000 par value US Government bond for$909.20. The yield to maturity on the bond is8.6%. What is the couponrate?

A.7.0%

B.8.6%

C.15.0%

D.7.5%

E.9.0%

6. The Federal Government 2year coupon bond has a face value of$1,000 and pays annual coupons of$33. The next coupon is due in one year.Currently, the one and twoyear spot rates on Federal Government zero coupon bonds are4% and4.5%. What is the correct price for the coupon bond at time zero(immediately)?

A.$977.68

B.$1,023.49

C.$1,025.00

D.$1,000.00

E.$976.17

7. A bond with an annual coupon of$100 originally sold at par for$1,000. The current yield to maturity on this bond is9%. Assuming no change inrisk, this bond would sell at a_____________ in order to compensate____________________________.

A.premium; the seller for the above market coupon rate

B.premium; the purchaser for the above market coupon rate

C.discount; the seller for the above market coupon rate

D.discount; the issuer for the higher cost of borrowing

E.discount; the purchaser for the above market coupon rate