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Quantitative Problem: Potter Industries has a bond issue outstanding with an annual coupon of 6% and a 10-year maturity. The par value of the bond is $1,000. If the going annual interest rate is 7.2%, what is the value of the bond? Do not round intermediate calculations. Round your answer to the nearest cent.

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Quantitative Problem: Potter Industries has a bond issue outstanding with a 6% coupon rate with semiannual payments of $30, and a 10-year maturity. The par value of the bond is $1,000. If the going annual interest rate is 7.2%, what is the value of the bond? Do not round intermediate calculations. Round your answer to the nearest cent.

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Quantitative Problem: Ace Products has a bond issue outstanding with 15 years remaining to maturity, a coupon rate of 7% with semiannual payments of $35, and a par value of $1,000. The price of each bond in the issue is $1,190.00. The bond issue is callable in 5 years at a call price of $1,070. What is the bond's current yield? Do not round intermediate calculations. Round your answer to two decimal places.

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What is the bond's nominal annual yield to maturity (YTM)? Do not round intermediate calculations. Round your answer to two decimal places.

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What is the bond's nominal annual yield to call (YTC)? Do not round intermediate calculations. Round your answer to two decimal places.

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Madsen Motors's bonds have 16 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 10%, and the yield to maturity is 11%. What is the bond's current market price? Round your answer to the nearest cent.

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A bond has a $1,000 par value, 8 years to maturity, and a 7% annual coupon and sells for $980.

1. What is its yield to maturity (YTM)? Round your answer to two decimal places.

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2. Assume that the yield to maturity remains constant for the next two years. What will the price be 2 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.

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Nesmith Corporation's outstanding bonds have a $1,000 par value, a 9% semiannual coupon, 6 years to maturity, and a 13% YTM. What is the bond's price? Round your answer to the nearest cent.

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An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 10% annual coupon. Bond L matures in 12 years, while Bond S matures in 1 year.

1. What will the value of the Bond L be if the going interest rate is 7%, 8%, and 11%? Assume that only one more interest payment is to be made on Bond S at its maturity and that 12 more payments are to be made on Bond L. Round your answers to the nearest cent.

   	7%	8%	11%
   Bond L	$	$	$
   Bond S	$	$	$

An investor has two bonds in her portfolio, Bond C and Bond Z. Each bond matures in 4 years, has a face value of $1,000, and has a yield to maturity of 9.1%. Bond C pays a 11.5% annual coupon, while Bond Z is a zero coupon bond.

1. Assuming that the yield to maturity of each bond remains at 9.1% over the next 4 years, calculate the price of the bonds at each of the following years to maturity. Round your answers to the nearest cent.

   Years to Maturity	Price of Bond C	Price of Bond Z
   4	$	$
   3	$	$
   2	$	$
   1	$	$
   0	$	$

An investor purchased the following five bonds. Each bond had a par value of $1,000 and a 11% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates fell, and each then had a new YTM of 5%. What is the percentage change in price for each bond after the decline in interest rates? Fill in the following table. Enter all amounts as positive numbers. Do not round intermediate calculations. Round your monetary answers to the nearest cent and percentage answers to two decimal places.

	Price @ 11%	Price @ 5%	Percentage Change
10-year, 10% annual coupon	$	$	%
10-year zero
5-year zero
30-year zero
$100 perpetuity

Harrimon Industries bonds have 6 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 10%.

1. What is the yield to maturity at a current market price of
   1. $869? Round your answer to two decimal places.

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   2. $1,236? Round your answer to two decimal places.

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A 9% semiannual coupon bond matures in 6 years. The bond has a face value of $1,000 and a current yield of 9.0493%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places.

Bonds price: $

YTM: %

Lourdes Corporation's 15% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 20 years, are callable 4 years from today at $1,050. They sell at a price of $1,337.17, and the yield curve is flat. Assume that interest rates are expected to remain at their current level.

1. What is the best estimate of these bonds' remaining life? Round your answer to the nearest whole number.

   years

Bond X is noncallable and has 20 years to maturity, a 9% annual coupon, and a $1,000 par value. Your required return on Bond X is 10%; if you buy it, you plan to hold it for 5 years. You (and the market) have expectations that in 5 years, the yield to maturity on a 15-year bond with similar risk will be 8.5%. How much should you be willing to pay for Bond X today? (Hint: You will need to know how much the bond will be worth at the end of 5 years.) Do not round intermediate calculations. Round your answer to the nearest cent.

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You are considering a 10-year, $1,000 par value bond. Its coupon rate is 11%, and interest is paid semiannually. If you require an "effective" annual interest rate (not a nominal rate) of 8.16%, how much should you be willing to pay for the bond? Do not round intermediate calculations. Round your answer to the nearest cent.

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Last year Janet purchased a $1,000 face value corporate bond with a 9% annual coupon rate and a 20-year maturity. At the time of the purchase, it had an expected yield to maturity of 9.34%. If Janet sold the bond today for $1,051.65, what rate of return would she have earned for the past year? Do not round intermediate calculations. Round your answer to two decimal places.

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