$($C$.)2\mathrm{.}36\%$

D$.4\mathrm{.}74\%$

E$.5\mathrm{.}506$

$13.$ The relationship between maturity and yield to maturity is called the

A$.$ loan covenant

B$.$ term structure

C$.$ bond indenture

D$.$ Fisher effect

E$.$ DRP structure

$14.$ Duration can be used to accurately measure bond price change even if the bond yield change is a large number.

A$.$ True

B$.$ False

$15.$ A bond with an $11$ percent coupon and a $9$ percent required return will sell at a premium to par.

A$.$ True

B$.$ False

$16.$ You would want to purchase a security if the price is the present value or if the expected return is the required rate of return.

A$.$ greater than or equal to; less than or equal to

B$.$ greater than or equal to; greater than or equal to

C$.$ less than or equal to; greater than or equal to

D$.$ less than or equal to; less than or equal to

$17.$ An eight$-$year corporate bond has a $7$ percent coupon rate. What should be the bond's price if the required return is $6$ percent and the bond pays interest semiannually?

A$.$ $$1,062\mathrm{.}81$

B$.$ $$1,062\mathrm{.}10$

C$.$ $$1,053\mathrm{.}45$

D$.$ $$1,052\mathrm{.}99$

E$.$ $$1,049\mathrm{.}49$

$18.$ A corporate bond, with $$1,000$ face value, has a coupon rate of $10$ percent and a required return of $10$ percent. This bond's fair present value is:

A$.$ $$924\mathrm{.}18.$

B$.$ $$1,000\mathrm{.}00.$

C$.$ $$879\mathrm{.}68.$

D$.$ $$1,124\mathrm{.}83.$

E$.$ not possible to determine from the information given.

$19.$ A bond that pays interest semiannually has a $6$ percent promised yield and a price of $$1,045.$ Innual interest rates are now projected to increase $50$ basis points. The bond's duration is five

$3$