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58) Gugenheim offers 12-year coupon bonds with semiannual payments. The yield to maturity is
6.23 percent, and the bonds sell at 101 percent of par. What is the coupon rate?
A) 3.09%
B) 3.18%
C) 3.31%
D) 6.35%
E) 6.61%
59) Delta bonds are priced at $989.64, have a yield to maturity of 7.18 percent, pay semiannual
payments, have a face value of $1,000, and have 6.5 years to maturity. What is the coupon rate?
A) 6.98%
B) 7.15%
C) 7.23%
D) 7.06%
E) 7.20%
60) DT Company bonds are priced at $932.17, have a par value of $1,000, a yield to maturity of
6.18 percent, and a coupon rate of 6.35 percent. How many years is it until this bond matures if
interest is paid semiannually?
A) 18.04 years
B) 20.42 years
C) 28.00 years
D) 40.84 years
E) 36.08 years
61) River Tours has 5.8 percent coupon bonds that pay interest semiannually. The face value of
each bond is $1,000, and the current market price is $1,003.54. If the yield to maturity is 5.68
percent, how many years is it until these bonds mature?
A) 3.49 years
B) 3.27 years
C) 5.06 years
D) 6.43 years
E) 6.55 years
62) The Beta Co. bonds have a maturity of 13 years, a face value of $1,000, a coupon rate of 6.5
percent, and pay interest annually. What is the percentage change in the price of these bonds if the
market yield rises to 6.9 percent from its current level of 6.5 percent?
A) –3.40%
B) –3.36%
C) 3.40%
D) 3.36%
E) –4.13%
63) TJ Machine bonds have a coupon rate of 5.3 percent, a face value of $1,000, and pay interest
semiannually. The bonds mature in 23 years and have a yield to maturity of 5.4 percent. What will
be the percentage change in the bond's price if the market rate increases by 1 percent to 6.4
percent?
A) 13.32%
B) 12.02%
C) –11.96%
D) –12.00%
E) –13.13%
64) Taylor Bros. bonds have a face value of $5,000, a current market price of $5,248.50, and a
coupon rate of 5.3 percent, compounded semiannually. What is the current yield on these bonds?
A) 5.38%
B) 5.05%
C) 5.17%
D) 5.30%
E) 5.41%
65) Delray bonds offer a coupon rate of 4.6 percent and currently sell at 99.2 percent of face value.
What is the current yield on these bonds?
A) 4.60%
B) 4.57%
C) 4.62%
D) 4.55%
E) 4.64%
66) The 12-year bonds issued by Golf Companies have a quoted yield to maturity of 7.9 percent, a
coupon rate of 8 percent, and semiannual payments. What is the effective annual yield on these
bonds?
A) 7.90%
B) 7.97%
C) 8.06%
D) 8.00%
E) 8.16%
67) A $1,000 face value bond is currently callable at a quoted price of 101. What is the amount of
the call premium?
A) $1.00
B) $.0101
C) $10.00
D) $1.01
E) $10.10
68) A zero coupon bond with a face value of $1,000 is issued at an initial price of $474.20 and a
25-year maturity. What is the implicit interest, in dollars, for the first year of the bond's life?
Assume semiannual interest.
A) $14.44
B) $17.58
C) $14.37
D) $21.03
E) $20.25
29
69) Autos and More offers a zero coupon bond with a yield to maturity of 9.3 percent. The bond
matures in 11 years and has a face value of $1,000. What is this bond worth today? Assume
semiannual compounding.
A) $367.91
B) $372.08
C) $375.99
D) $369.04
E) $374.17
70) Westover Company needs $1.8 million to expand its business. To accomplish this, the firm
plans to sell 25-year, $1,000 face value zero-coupon bonds. The bonds will be priced to yield 7.15
percent with interest compounded semiannually. What is the minimum number of bonds the
company must sell? Ignore all issue costs.
A) 10,424 bonds
B) 11,429 bonds
C) 10,333 bonds
D) 10,118 bonds
E) 11,410 bonds
71) Assume a taxable bond yields 6.38 percent and a comparable municipal bond yields 4.27
percent. At what tax rate would an investor be indifferent between the bonds?
A) 66.93%
B) 33.07%
C) 51.49%
D) 48.51%
E) 57.03%
72) Assume an investor has a tax rate of 33 percent. What municipal bond rate is equivalent to a
corporate rate of 7.8 percent for this investor?
A) 5.86%
B) 4.37%
C) 5.23%
D) 6.08%
E) 3.64%
73) What is the market price of a bond with a $5,000 face value if the price quote is 101.1629?
A) $4,942.52
B) $5,058.15
C) $5,581.45
D) $4,938.08
E) $5,116.29
74) A zero coupon bond has a yield to maturity of 7.48 percent, semiannual compounding, a
$1,000 face value, and a market quote of 41.0932. How many years is it until this bond matures?
A) 24.22 years
B) 23.18 years
C) 12.11 years
D) 24.66 years
E) 12.33 years
