A 20-year bond pays $40 per year and pays semiannually. The rates increased by 40 bips since and now there remains 16 years until maturity.
1. What was the YTM at the issue of this bond?
a. 20%
b. 4.0%
c. 4.4%
d. 2.2%
2. What is the current YTM?
a. 4.4%
b. 2.0%
c. 2.2%
d. 4.0%
3. What is the effective annual bond yield?
a. 3.96%
b. 4.04%
c. 4.4%
d. 3.09%
4. What is the value of this bond?
a. 1014.45
b. 1010.25
c. 954.40
d. 999.75
5. Which amount is Par value, since none was mentioned.
a. 100,000
b. 1,000
c. 50
d. 500