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Question 18

Suppose the US government just issued a $1,000 PAR value coupon bond today. This bond will mature in 9 years from today. This Bond's annual coupon rate is 3%. Coupons are paid 2 time(s) in a year. The Bond is currently trading at $1038.32.

What is the Yield to Maturity (YTM) of this Bond? In other words, what is the return on investment for the bond investor? Enter your answer in the following format: 0.1234 Hint: Answer is between 0.0224 and 0.0272

Question 19

Which of the following are TRUE statements pertaining to "Yield to Maturity" and "Yield to Call"?

	A.	An investor of a non-callable bond gets YTM (yield to maturity) as the return
	B.	A callable bond can be bought back by the bond issuer before the maturity period
	C.	An investor of a non-callable bond sometimes gets YTC (yield to call) as the return
	D.	An investor of a callable bond sometimes gets YTC (yield to call) as the return
	E.	A callable bond can be bought back by the bond investor before the maturity period

Question 20

Which of the following are FALSE statements pertaining to "Yield Curve"?

	A.	A normal yield curve is upward-sloping
	B.	A normal yield curve has lower yields for longer-term maturity and higher yields for shorter-term maturities
	C.	A Yield Curve has maturity (years) on the x-axis and yield to maturity (YTM shown in percentages) on the y-axis
	D.	A normal yield curve reflects a stable and expanding economy
	E.	The inverted yield curve is a sign of a booming economy

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