1. A $1,000 bond with a coupon rate of 6.2% paid semiannually has eight years to maturity and a yield to maturity of 8.3%. If interest rates rise and the yield to maturity increases to 8.6%, what will happen to the price of the bond?
The price of the bond will rise by $15.78.
The price of the bond will fall by $18.93.
The price of the bond will fall by $15.78.
The price of the bond will not change.
2. Mart's Boutique has sales of $820,000 and costs of $540,000. Interest expense is $36,000 and depreciation is $59,000. The tax rate is 35 percent. What is the net income?
$158,600
$120,250
$105,000
$179,250
$99,600