Since then the bonds yield to maturity ytm has decreased


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1. A 10-year annual coupon bond was issued four years ago at par. Since then the bond's yield to maturity (YTM) has decreased from 9% to 7%. Which of the following statements is true about the current market price of the bond?

  • The bond is selling at a discount
  • The bond is selling at par
  • The bond is selling at a premium
  • The bond is selling at book value
  • Insufficient information

2. A firm is evaluating a project with an initial cost of $ 683,716 and annual cash inflows of $ 260,125 per year (first cash flow to be received exactly one year from today) for each of the next 5 years. If the cost of capital for this project is 12 %, what is this project's NPV? 

3. If the returns on Stock A are as follows: Year 1 return = -20 %, Year 2 return = 33 %, Year 3 return = 8 %, Year 4 return = 33 %, and Year 5 return = 28 %, what is the average return for Stock A over this 5 year period? (Record your answer as a percent rounded to 1 decimal place. If your answer is negative, place a minus sign before your number with no space between the sign and the number. For example, record negative 14.284% as -14.3).

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Basic Computer Science: Since then the bonds yield to maturity ytm has decreased
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