Among the four bonds below, which one would be likely to exhibit greatest sensitivity to the interest rate?

a.A coupon paying bond with 15 years until maturity

b.A zero-coupon bond with 10 years until maturity

c.A coupon paying bond with 10 years until maturity

d.A zero-coupon bond with 15 years until maturity

Suppose the interest rate is 9% per annum, compounded monthly. Then the present value of an annuity that pays $233 every quarter for the next seven years is closest to:

a.$4791

b.$4744

c.$5041

d.$4802

Anindita Corp. wants to issue a 10-year coupon bond. The face value of the bond is $1000 and the bond makes semiannual coupon payments. Its outstanding 7.50 percent bonds with a remaining maturity of 10 years are currently trading at $1145. These bonds also have a face value of $1000 and make semiannual payments. If the company wants the new bonds to sell at par, what should be the coupon rate on these bonds?

a.

6.05%

b.

5.59%

c.

7.50%

d.

5.67%