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QUESTION 6

For this and the next 2 questions. A 7-year, $1,000 par bond has an 8% annual coupon with a yield to maturity of 7.5%. Coupons are paid semiannually. This bond can be called in 2 years at a call price of $1,010. Calculate the price of this bond

		A. $1,026.48
		B. $1,026.85
		C. $1,009.13
		D. None of the above

QUESTION 7

Assuming that the above bond will be called, calculate the yield to call.

		A. 7.018%
		B. 7.218%
		C. 3.506%
		D. 7.012%
		E. 7.791%
		F. None of the above

QUESTION 8

For the above bond, calculate the CURRENT YIELD.

		A. 7.018%
		B. 7.218%
		C. 3.506%
		D. 7.012%
		E. 7.791%
		F. None of the above

QUESTION 9

A $1,000 par bond with a coupon rate of 5% is currently selling for $915. This bond matures in 4 years. Suppose that this bond's coupons can be reinvested at 3% per year. Calculate the realized compound yield (RCY). Assume annual interest payments.

		A. 7.018%
		B. 7.218%
		C. 3.506%
		D. 7.012%
		E. 7.791%
		F. None of the above

QUESTION 10

The realized compound yield on a coupon-paying bond would always be equal to the bond's yield to maturity if

		A. the coupon rate is equal to yield to maturity at the time a bond is issued
		B. the bond is issued at par
		C. the bond is issued at par and its coupons are reinvested at the coupon rate
		D. None of the above

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