Question: 1. Mr. Bond is considering purchasing a bond with 15-year maturity and $1,000 face value. The coupon interest rate is 8% and the interest is

1. Mr. Bond is considering purchasing a bond with 15-year maturity and $1,000 face value. The coupon interest rate is 8% and the interest is paid annually. If Mr. Bond requires 7% yield to maturity on the investment, then, what is price of the bond ? Also, indicate whether the bond is a discount bond or a premium bond or a par bond. [Hint: First calculate the annual interest payment] 2. Mr. Marrow has just purchased a 5-year, $1,000 par value bond. The coupon rate on this bond is 9%, and the interest is paid annually. If he expect to earn a 10 percent yield to maturity on this bond, how much did he pay for it? +1 3. 10-year, 8% coupon bond that pays interest annually is currently selling for $1,083 What is the yield to maturity of the bond? [The face value of the bond is $1,000] 4. A four-year bond has an 10% coupon rate and a face value of $1000. If the current price of the bond is $870.51, calculate the yield to maturity of the bond (assume annual interest payments). Also, indicate whether the bond is a discount bond or a premium bond or a par bond

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