1. Staind, Inc., has 8 percent coupon bonds on the market that have 12 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 10 percent, what is the current bond price?
A. $1,030.00
B. $820.54
C. $863.73
D. $1,154.72
E. $906.91
2. Ackerman Co. has 9 percent coupon bonds on the market with eight years left to maturity. The bonds make annual payments. If the bond currently sells for $1,123.94, what is its YTM? Assume a par value of $1,000.
A. 11.15%
B. 13.15%
C. 10.08%
D. 6.93%
E. 8.07%
3. Kiss the Sky Enterprises has bonds on the market making annual payments, with 9 years to maturity, and selling for $910. At this price, the bonds yield 7.5 percent. What must the coupon rate be on the bonds?
A. 6.19%
B. 6.69%
C. 12.18%
D. 6.09%
E. 7.50%
4. Ngata Corp. issued 18-year bonds 2 years ago at a coupon rate of 10.6 percent. The bonds make semiannual payments. If these bonds currently sell for 100 percent of par value, what is the YTM?
A. 10.60%
B. 11.66%
C. 9.54%
D. 12.72%
E. 5.30%
5. An investment offers a 10.5 percent total return over the coming year. Bill Bernanke thinks the total real return on this investment will be only 4.0 percent. What does Bill believe the inflation rate will be over the next year?
A. 6.25%
B. 7.19%
C. 8.12%
D. 4.38%
E. -5.88%