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    Multiple Choice

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    1.
    The Carter Company's bonds mature in 10 years have a par value of $1,000 and an annual coupon payment of $80. The market interest rate for the bonds is 9%. What is the price of these bonds?

    $935.82
    $941.51
    $958.15
    $964.41
    $979.53

    2.
    Rollincoast Incorporated issued BBB bonds two years ago that provided a yield to maturity of 11.5%. Long-term risk-free government bonds were yielding 8.7% at that time. The current risk premium on BBB bonds versus government bonds is half of what it was two years ago. If the risk-free long-term government bonds are currently yielding 7.8%, then at what rate should Rollincoast expect to issue new bonds?

    7.8%

    8.7%

    9.2%

    10.2%

    12.9%

    3. A 10-year, $1,000 face value bond has an 8.5% annual coupon. The bond has a current yield of 8%. What is the bond's yield to maturity?

    8.25%

    8.86%

    7.59%

    8.50%

    8.00%

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    https://brainmass.com/business/bond-valuation/multiple-choice-222359

    Solution Summary

    The solution explains some multiple choice questions relating to bonds

    $2.19

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