1. Jerry just purchased a bond paying semiannual interest for a price of $1,000. Yields on bonds of similar risk are 9.9%. The bond has a face value of $1,000. Based on this? information, the coupon rate of the bond? is: ?(Select the best choice? below.)
A. The coupon rate of the bond is 8.7 %
B. The coupon rate of the bond is 9.9 %
C. The coupon rate of the bond is 8 %
D. The coupon rate of the bond is 11.5 %
E. We need the maturity of the bond to solve this problem.
2. A zero coupon bond has a face value of $1,000 and matures in 4 years. Investors require? a(n) 7.6% annual return on these bonds. What should be the selling price of the? bond? The price of the bond is ?$________. ?(Round to the nearest? cent).
3. Credit card issuers must print the annual percentage rate (APR) of their cards on monthly statements. If the APR of a card is 23%, and interest is paid monthly, what is the effective annual interest rate of that card?