1. Double Points. Wicked Good Slippers Corporation has bonds outstanding that currently sell for $1175. They mature in 10 years, have a par value of $1,100, monthly coupon payments, and an annual coupon rate of 9%. Find the annual yield to maturity.
2. Yield to Call. Mouse House Ltd.'s bonds currently sell for $1200. They mature in 12 years, can be called in 5 years, pay semi-annual coupons of $50, have a par value of $1000, and a call value of $1,050. Calculate the yield to call.
3. Grand Scale Productions Corporation currently sells a 10-year bond that has a par value of $1,000, market price of $1,100 but suppose you buy the bond for $1,150. The coupon rate is 8% and payments are made quarterly. The bond may be called after five years have elapsed for $1050 and, if called, it would occur at the beginning of the year. Assume interest rates for years 6-10 are 9%, 10%, 8%, 7%, and 9%, respectively. Calculate your annual yield to call.