38) The current yield(CP/P) on a 10-year, Rs 1000 face value bond that currently sells at Rs 900 and makes 12% coupon payments is... ..% a) 120/900 b) 96/900 c) 96/1000 d) 120/800 e) 800/120 f) 1000/120 39) The price of a 12% 10-year Rs 1000 face value bond is Rs.... when YTM is 10% and bond makes annual payments a) 120(1-1.1.0/1.1 + 1000/0.10 b) 120(1-1.1-9)/0.1 + 1000/0.110 c) 120(1-1.1-1)/1.1 - 1000/1.10 d) 120(1.1-1)/0.1 + 1000/1.110 e) 120(1-1.1-1)/0.1 + 1000/1.10 40) The price of a 12% 10-year Rs1000 face value bond is Rs... ...when YTM is 10% and bond makes semi-annual payments a) 120(1-1.1-1)/0.1 + 1000/1.10 b) 60(1-1.1-1)/0.1 + 1000/1.10 c) 120(1-1.1-07/0.1 + 1000/1.10 d) 120(1-1.1-20)/0.1 + 1000/1.120 e) 60(1-1.05-20)/0.05 + 1000/1.0520 STOCK VALUATION 41) Which of the following is incorrect? a) The Po^is positively related to its dividends b) the Po^ is inversely related to K c) the Po^ is directly related to g d) the increase in K will decrease Po^ e) the increase in g will decrease Po^ 42) Which of the following is correct? a) The equilibrium price (Po^) will be greater than the current price (Po) when K->K b) the P. will be > Powhen K^ Kthe Po^ will be Kthen the Po^> Po e) with constant growth model the holding period of a stock does affect Po^