Reference no: EM132910301

Problem 1: LEGUS has a $1,000 par value, 30-year bond outstanding that was issued 20 years ago at an annual coupon rate of 10%, paid semiannually. Market interest rates on similar bonds are 7%. Calculate the bond's price.

Select one:

a. $1,168.31
b. $1,213.19
c. $956.42
d. $1,000.00

Problem 2: Money market instruments include:

Select one:

a. Treasury-bills
b. Treasury-bonds
c. common stock
d. preferred stock

Problem 3: The discount rate used to value a bond is

Select one:

a. fixed for the life of the bond.
b. determined by the issuing company.
c. the market rate of interest.
d. the coupon interest rate.

Problem 4: The present value interest factor is calculated as:

Select one:

a. 1/(1+r)(t)
b. 1/(1+rt)
c. 1/(1+r-t)
d. 1/(1+r)t