What is the price of these bonds

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Reference no: EM131993697

1. A 10-year, $1,000 face value bond sells for $925 and has an 8% annual coupon rate. What is the bond’s current yield?

A. 8.65% B. 8.00% C. 8.33% D. 7.88% E. 8.95%

2. Which of the following statement is correct?

A. Coupon interest rate is the rate of return earned on a bond if it is held to maturity.

B. If a bond’s yield to maturity exceeds its coupon rate, the bond will sell at a discount.

C. All else equal, if a bond’s yield to maturity increases, its price will fall.

D. Current yield measures the total return for investors

E. Both B and C are correct.

3. The Carter Company's bonds mature in 10 years have a par value of $1,000 and an annual coupon interest rate of 8%. The market interest rate for the bonds is 9%. What is the price of these bonds?

A. $935.82

B. $941.51

C. $958.15

D. $964.41

E. $979.53

Reference no: EM131993697

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