Transcribed Image Text
BONDS VALUATIONS PRACTICE1. A bond maturing in 20 years at a par value of $1,000 has acoupon rate of 6% and current yield of 8%. Is this a discount bondor a premium bond? What is the price of the bond?2. A bond maturing in 15 years at a par value of $1,000 has acoupon rate of 4% and current yield of 3%. Is this a discount bondor a premium bond? What is the price of the bond?3. A bond maturing in 10 years at a par value of $1,000 has acoupon rate of 9% and current market price of $1,145.68. What isthe bond’s annual yield?4. A bond maturing in 15 years at a par value of $1,000 has acoupon rate of 5%. If the current interest rate is 4%, what is theprice of the bond?5. A bond maturing in 15 years at a par value of $1,000 has acoupon rate of 7% and current market price of $1,140.95. If thebond is callable after 5 years at $1,050, what is the bond’s yieldto call? (Hint: Click on YTC tab in the Bond Calculator app).