10 May WHAT IS THE DOLLAR AMOUNT OF THE ANNUAL COUPON PAYMENT?
QUESTION 1A Consol (perpetual) Bond pays £75.00 at the end of each year. If the market interest rate is 9.0% what is the selling price for this bond?10 points QUESTION 2A Consol (perpetual) Bond pays £100.00 at the end of each year. If the market interest rate is 7.50% what is the selling price for this bond?10 points QUESTION 3A Consol (perpetual) Bond pays £100.00 at the end of each year. If the market interest rate is 6.25% what is the selling price for this bond?10 points QUESTION 4Walnut Company has a $1000 face value 7.5% coupon bond making annual coupon payments with 10 yearsto maturity. What is the dollar amount of the annual coupon payment?10 points QUESTION 5Oaktree Company has a $1000 face value 9% coupon bond making annual coupon payments with 10 years to maturity. What is the dollar amount of the annual coupon payment?10 points QUESTION 6Maple Leaf Company has a $1000 face value 12% coupon bond making semi-annual coupon payments with10 years to maturity. What is the dollar amount of the coupon payment received every six months?10 points QUESTION 7You are considering investing in a $1000 face value 8% semi-annual coupon bond with 3 years left to maturity. Similar bonds are yielding 9.5% in the market so the current price of this bond is _______ and if market interest rates drop to 8.25% the selling price of the bond would _____________?A. $947.73; increase to $974.67B. $947.73; decrease to $924.67C. $961.63; increase to $993.47D. $961.63; decrease to $933.4710 points QUESTION 8You are considering investing in a $1000 face value 12% semi-annual coupon bond with 4 years left to maturity. Similar bonds are yielding 11% in the market so the current price of this bond is _______ and if market interest rates drop to 10% the selling price of the bond would _____________?A. $880.50; increase to $924.50B. $936.67; decrease to $915.50C. $1 031.67; decrease to $1 016.50D. $1 031.67; increase to $1 064.6310 points QUESTION 9You are considering investing in a $1000 face value 10% semi-annual coupon bond with 8 years left to maturity. Similar bonds are yielding 9.5% in the market so the current price of this bond is _______ and if market interest rates increase to 11% the selling price of the bond would _____________?A. $957.69; increase to $1 017.50B. $957.69; decrease to $860.50C. $1 027.59; decrease to $947.69D. $1 027.59; increase to $1 107.6910 points QUESTION 10You are considering investing in a $1000 face value 9% semi-annual coupon bond with 10 years left to maturity. Similar bonds are yielding 10% in the market so the current price of this bond is _______ and if market interest rates increase to 11% the selling price of the bond would _____________?A. $937.69; increase to $974.50B. $937.69; decrease to $880.50C. $1 062.50; increase to $1 087.69D. $1 062.50; decrease to $1 023.50
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