A consol bond pays forever two semiannual coupons at an annual coupon rate of 3.60% In other words, the initial principal is never reduced nor repaid.The yield-to-maturity is 6.80% and a coupon was paid yesterday.What is the bond price?

a.$582b.$641c.$438d.$481e.$529

2.

A 20-year Treasury bond was issued yesterday at par (i.e., at its $1,000 face value).Its coupon rate is 5.60%.Today, its price increased $30.70 .By how many basis points did the yield-to-maturity change?

a.-34b.-30c.-28d.-37e.-25

3.

A 10-year bond with a 4.40% coupon rate was issued at a price of $926 .What was the bond's yield to maturity at time of issue?

a.5.37%b.4.44%c.4.03%d.3.67%e.4.88%

4.

Today is July 1, 2525, and a zero coupon bond matures on December 31, 2544.You buy the bond today at its price of $334 .World events tonight cause all interest rates to decrease 55 basis points.What is the new bond price?

a.$449b.$337c.$371d.$494e.$408

The following set-up pertains to the next few questions

Bonds A and Z are zero coupon securities with maturities of21/2years and 121/2years, respectively.The current yield to maturity for each bond is 9.40%.

5.

What are the bond's prices?

 

Answer rating: 100% (QA)

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