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Answer questions A-E

Question A

Kessel Inc. offers a zero-coupon bond that has 30 years to maturity and the yield-to-maturity of similar bonds is 4%. What is the market price of Kessel Inc.'s bond?

Question B

Jakku Corp. bonds bearing a coupon rate of 3%, pay coupons semiannually, have five years remaining to maturity, and are currently priced at $970 per bond. What is the yield to maturity?

Question C

A bond carrying a 7% coupon rate that has a market price of $1,000 has a yield to maturity (YTM) that is...

Question 8 options:

	A) Greater than 7%
	B) Exactly 7%
	C) Less Than 7%
	D) Not enough information to determine YTM

Question D

A bond with a face value (par value) of $1,000 that is currently selling for less than $1,000 in the market is called a:

	A) Par Bond and the YTM < Coupon Rate
	B) Par Bond and the YTM > Coupon Rate
	C) Premium Bond and the YTM < Coupon Rate
	D) Premium Bond and the YTM > Coupon Rate
	E) Discount Bond and the YTM < Coupon Rate
	F) Discount Bond and the YTM > Coupon Rate

Question E

Holding everything else constant, which of the following would decrease the YTM for a bond? (Select all that apply, if any)

	A) Making the bond callable.
	B) Making the bond have senior priority of payment status over junior status.
	C) Making the bond backed by collateral.
	D) Lowering the credit rating of the bond.
	E) Making the bond's maturity date longer.

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