1. Analyze the 10-year, 8% coupon rate (semi-annual payment), $1,000 par value bond. The bond currently sells for $1,318. What’s the bond’s yield to maturity?
5.36%
4.10%
2.05%
6.15%
2. Analyze the 10-year, 8% coupon rate (semi-annual payment), $1,000 par value bond. The bond currently sells for $1,318. What’s the bond’s current yield, and capital gain yield?
6.07%, 0.71%
6.07%, -0.71%
6.07%, 1.97%
6.07%, -1.97%
3. An 8% $1,000 bond matures in 13 years, pays interest annually, and has a yield to maturity of 9.5%. What is the current market price of the bond?______
$889.35
$1,000
$890.63
$903.62
4. If you earned a rate of return of 8% on your bond investments last year. During that time the inflation rate was 2.68%. What is your real rate of return?
5.18%
4.17%
3.68%
6.20%