finance data bank
[i]. An 8 percent annual coupon, noncallable bond has ten years until it matures and a yield to maturity of 9.1 percent. What should be the price of a 10year noncallable bond of equal risk which pays an 8 percent semiannual coupon? Assume both bonds have a par value of $1,000.
a. $ 898.64
b. $ 736.86
c. $ 854.27
d. $ 941.09
e. $ 964.23
[ii]. Kennedy Gas Works has bonds which mature in 10 years, and have a face value of $1,000. The bonds have a 10 percent quarterly coupon (i.e., the nominal coupon rate is 10 percent). The bonds may be called in five years. The bonds have a nominal yield to maturity of 8 percent and a yield to call of 7.5 percent. What is the call price on the bonds?
a. $ 379.27
b. $1,025.00
c. $1,048.34
d. $1,036.77
e. $1,136.78
[iii]. Hood Corporation recently issued 20year bonds. The bonds have a coupon rate of 8 percent and pay interest semiannually. Also, the bonds are callable in 6 years at a call price equal to 115 percent of par value. The par value of the bonds is $1,000. If the yield to maturity is 7 percent, what is the yield to call?
a. 8.33%
b. 7.75%
c. 9.89%
d. 10.00%
e. 7.00%
[iv]. A 12year bond with a 10 percent semiannual coupon and a $1,000 par value has a nominal yield to maturity of 9 percent. The bond can be called in five years at a call price of $1,050. What is the bond's nominal yield to call?
a. 4.50%
b. 8.25%
c. 8.88%
d. 8.98%
e. 9.00%
[v]. A corporate bond with an 11 percent semiannual coupon has a yield to maturity of 9 percent. The bond matures in 20 years but is callable in ten years. The maturity value is $1,000. The call price is $1,055. What is the bond's yield to call?
a. 8.43%
b. 8.50%
c. 8.58%
d. 8.65%
e. 9.00%
[vi]. A corporate bond which matures in 12 years, pays a 9 percent annual coupon, has a face value of $1,000, and a yield to maturity of 7.5 percent. The bond can first be called four years from now. The call price is $1,050. What is the bond’s yield to call?
a. 6.73%
b. 7.10%
c. 7.50%
d. 11.86%
e. 13.45%
[vii]. A bond that matures in 11 years has an annual coupon rate of 8 percent with interest paid annually. The bond’s face value is $1,000 and its yield to maturity is 7.5 percent. The bond can be called 3 years from now at a price of $1,060. What is the bond’s nominal yield to call?
a. 9.82%
b. 8.41%
c. 8.54%
d. 8.38%
e. 7.86%
[viii]. McGriff Motors has bonds outstanding which will mature in 12 years. The bonds pay a 12 percent semiannual coupon and have a face value of $1,000 (i.e., the bonds pay a $60 coupon every six months). The bonds currently have a yield to maturity of 10 percent. The bonds are callable in 8 years and have a call price of $1,050. What are the bonds' yield to call?
a. 8.89%
b. 9.89%
c. 9.94%
d. 10.00%
e. 12.00%
[ix]. A company is issuing $1,000 bonds at par value. The coupon rate (and yield to maturity) on the bonds is 8 percent (with annual payments) and the bonds will mature in 10 years. The bonds can be called at a call premium of 5 percent above face value after 3 years. What is the aftertax yield to call for an investor with a 31 percent tax rate?
a. 5.52%
b. 5.90%
c. 6.60%
d. 7.07%
e. 9.52%
[x]. A 15year bond with a 10 percent semiannual coupon has a par value of $1,000. The bond may be called after 10 years at a call price of $1,050. The bond has a nominal yield to call of 6.5 percent. What is the bond's yield to maturity, stated on a nominal, or annual basis?
a. 5.97%
b. 6.30%
c. 6.75%
d. 6.95%
e. 7.10%
[xi]. You have just been offered a $1,000 par value bond for $847.88. The coupon rate is 8 percent, payable annually, and annual interest rates on new issues of the same degree of risk are 10 percent. You want to know how many more interest payments you will receive, but the party selling the bond cannot remember. Can you determine how many interest payments remain?
a. 14
b. 15
c. 12
d. 20
e. 10
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