Question: Please show your work how you got the answer!! Exercise 3: Bonds Practice 3 1. -A bond has a coupon rate of 7% and pays

Please show your work how you got the answer!!

Please show your work how you got the answer!! Exercise 3: Bonds

Practice 3 1. -A bond has a coupon rate of 7% and

pays coupons semi-annually. The bond matures in 15 years and the yield

Exercise 3: Bonds Practice 3 1. -A bond has a coupon rate of 7% and pays coupons semi-annually. The bond matures in 15 years and the yield to maturity on similar bonds is 7.5%. Is this a par, premium or discount bond? what is the fair value of the bond? A or B or A-B, Bond A has a coupon rate of 4% and sells at $1010. Bond B has a coupon rate of 4% and sells at $990. Which bond has a higher yield to maturity? 2. A bond is priced at $1001.50. Yield to maturity on similar bonds is 5%, what is the approximate coupon rate of the bond? Is it slightly lower or higher than 5%? 3, A bond is priced at $1025 and matures in 3 years. The bond pays coupons semi-annually. If the fair market yield on the bond is 4.5%, what is the bond's coupon payment? What is the bond's coupon rate? 4. True or False. If an investor has a very high tax rate she should probably choose a corporate bond over a municipal bond. 5. A or B or A-B, Bond A pays a $110 per year. Bond B has a coupon rate of 11%, which bond has the higher price? 6

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