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1. Your broker offers you the opportunity to purchase a bond with coupon payments of...

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Accounting

1. Your broker offers you the opportunity to purchase a bond with coupon payments of $100 per year and face value of $1000. If the yield to maturity on similar bonds is 11%, this bond should:

A) Sell for the same price as the similar bond regardless of their respective maturities.

B) Sell at a premium.

C) Sell at a discount.

D) Sell for either a premium or a discount but it's impossible to tell which.

E) Sell for par value.

2. Dizzy Corp. bonds bearing a coupon rate of 4.0%, pay coupons semiannually, have twelve years remaining to maturity, and are currently priced at $915 per bond. What is the yield to maturity?

3. D&G Enterprises issues bonds with a $1,000 face value that makes annual coupon payments of $50. What is the annual coupon rate?

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