maturity for five$-$year $($annual$-$payment$)$ coupon corporate bonds of various ratings.

a$.$ Assuming the bonds will be rated AA$,$ what will the price of the bonds be$?$

whole number.$)$

c$.$ What must be the rating of the bonds for them to sell at par?

d$.$ Suppose that when the bonds are issued, the price of each bond is $$960\mathrm{.}41.$ What is the likely rating of the bonds? Are they junk bonds?

a$.$ Assuming the bonds will be rated AA$,$ what will the price of the bonds be$?$

The price of the bonds will be $

$($Round to the nearest cent.$)$

whole number.$)$

The number of bonds to be issued is

$($Round to the nearest integer.$)$

c$.$ What must be the rating of the bonds for them to sell at par? $($Select the best choice below.$)$

A$.$ For the bonds to sell at par, the coupon must equal the yield. Since the coupon is $6\mathrm{.}97\%,$ the yield must also be $6\mathrm{.}97\%,$ or BBB rated.

B$.$ For the bonds to sell at par, the coupon must equal the yield. Since the coupon is $6\mathrm{.}37\%,$ the yield must also be $6\mathrm{.}37\%,$ or A rated.

C$.$ For the bonds to sell at par, the coupon must equal the yield. Since the coupon is $6\mathrm{.}58\%,$ the yield must also be $6\mathrm{.}58\%,$ or A rated.

D$.$ For the bonds to sell at par, the coupon must equal the yield. Since the coupon is $6\mathrm{.}58\%,$ the yield must also be $6\mathrm{.}58\%,$ or BBB rated.

A$.$ Given a yield of $6\mathrm{.}97\%,$ it is likely these bonds are rated BBB$.$ No$,$ BBB$-$rated bonds are not junk bonds.

B$.$ Given a yield of $7\mathrm{.}56\%,$ it is likely these bonds are rated BB$.$ No$,$ BB$-$rated bonds are not junk bonds.

C$.$ Given a yield of $7\mathrm{.}56\%,$ it is likely these bonds are rated BB$.$ Yes, BB$-$rated bonds are junk bonds.

D$.$ Given a yield of $6\mathrm{.}97\%,$ it is likely these bonds are rated BBB$.$ Yes, BBB$-$rated bonds are junk bonds.