1. If a 6% annual coupon bond which matures in 12 years is currently selling for $1,210.59, what is the bond s yield to maturity?
7.17%
3.61%
None of these
7.06%
3.78%
2. For a standard semi-annual coupon bond, when interest rates increase, which of the following is NOT true:
The price of the bond falls.
None of these.
The coupon amount increases.
The present value of the bond s remaining cash flows declines.
The bond is called a discount bond.