Question: Problem 5 (20 points, 10 minutes) A $1,000 face value corporate bond with a 6.5 percent coupon (paid semiannually) has 10 years left to maturity.

Problem 5 (20 points, 10 minutes) A $1,000 face value corporate

Problem 5 (20 points, 10 minutes) A $1,000 face value corporate bond with a 6.5 percent coupon (paid semiannually) has 10 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 7 percent. The firm has recently gotten into some trouble and the rating agency is downgrading the bonds to BB. The new appropriate discount rate will be 8 percent. What will be the percentage change in the bond's price? Problem 6 (14 points, 5 minutes) XYZ co. has bonds in the market selling for $986.98 with a face value of $1,000 and 3 years maturity. The bonds pay quarterly coupon payments. The YTM is 4 % percent. What the coupon rate be on these bonds? Page 5 of 5 BAF 311- Exam II-Fall 2021

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