1. One year ago, an investor bought a 15-year $1000 face-value bond that has an annual coupon rate of 6%, and interest payments are paid semi-annually. The yield to maturity was 8.3% when the investor bought the bond, but the yield to maturity is 9.2% today. How much has the price of the bond decreased since the date of purchase?
A. $61.56 B. $62.29 C. $53.07 D. $53.81 E. $90.00
2. You own a bond that has a 6 percent annual coupon and matures five years from now. You purchased this 10-year bond at par value when it was originally issued. Which one of the following statements applies to this bond if the relevant market interest rate is now 5.8 percent?
a. current yield to maturity is greater than 6%
b. the current yield is 6%
c. the next payement will be 30 percent
d. the bond is currently valued at one half od its issued price
e. you will realized a capital gain on the bond if you stil it today