# Zhihong's Crafts needs $325,000 today to purchase some new equipment. The firm is a planning on issuing

## Question:

Zhihong's Crafts needs $325,000 today to purchase some new equipment. The firm is a planning on issuing 12-year zero-coupon bonds. The current market rate of interest is 7.5%. How many bonds must Zhihong's Crafts sell to raise the money they need?

2-(20 marks)

A Provincial bond is quoted at a price of 88.21 and carries a 7.25% coupon. The bond pays interest semi-annually. What is the current yield on one of these bonds?

3-(20 marks)

The Anisha Corporation offers a 12% bond with a current market price of $923.60. The yield to maturity is 14.2%. The face value is $1,000. Interest is paid semi-annually. How many years is it until this bond matures?

4-(20 marks)

Arshdeep owns a 8% coupon bond that has 15 years to maturity. The bond pays interest annually and is currently selling for $1,122.40. What is the yield to maturity on this bond?

5-(20 marks)

Hooman today purchased a bond at a quoted price of 97.6. The bond matures in five years, pays semi-annual interest, and has a 7% coupon rate. If Hooman holds the bond to maturity, what real rate of return will she earn if inflation remains constant at 2.5%?