A bond with a coupon rate of 65 maturing in 10 years at a


1. A bond with a coupon rate of 6.5%, maturing in 10 years at a value of $1,000 and current market price of $695 will have a current yield of

A. 11.3%

B. 10.2%

C. 9.4%

D. 8.5%

2. A convertible bond is currently selling for $1,125. It is convertible into 20 shares of common which presently sell for $40 per share. The conversion premium is

A. $325

B. $215

C. 66.74 shares

D. 23.8 shares

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Financial Management: A bond with a coupon rate of 65 maturing in 10 years at a
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