1. Ackerman Co. has 7 percent coupon bonds on the market with twelve years left to maturity. The bonds make annual payments. If the bond currently sells for $1,055.17, what is its YTM? Assume a par value of $1,000.
a. 9.68%
b. 6.33%
c. 7.68%
d. 6.73%
e. 7.30%
2. The Bad Guys Company is notoriously known as a slow-payer. It currently needs to borrow $25,000 and only one company will even deal with Bad Guys. The terms of the loan call for daily payments of $30.76. The first payment is due today. The interest rate is 21% compounded daily. What is the time period of this loan?
2.88 years
2.94 years
3.00 years
3.13 years
3.25 years