1. Vino de Luche has outstanding bonds that currently sell for $950, have a par value of $1,000, and have 15 years left to maturity. If the bonds carry an coupon rate of 12%, what annual yield to maturity do the bonds promise, given the following added conditions?
The coupon interest is paid annually
The coupon interest is paid semi-annually
The coupon interest is paid quarterly
The coupon interest rate is paid monthly
2. Tech Systems has outstanding bonds that carry $1,000 par value and an annual coupon of 12%. If these bonds have 16 years left to maturity, how much would each bond sell for today, given the additional conditions described below?
The bond pays the coupon interest annually and bonds of similar risk currently pay 10% APR.
The bond pays the coupon interest semi-annually and bonds of similar risk currently pay 10% APR.
The bond pays the coupon interest annually and bonds of similar risk currently pay 12% APR.
The bond pays the coupon interest semi-annually and bonds of similar risk currently pay 12% APR.