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75) A $1,000 Treasury bond matures in 13.5 years, pays interest semiannually, and carries a
coupon rate of 3.53 percent. What is the price of this bond if the discount rate is 4 percent?
A) $991.17
B) $951.34
C) $949.38
D) $976.96
E) $997.08
76) The ABT Co. zero coupon bonds have a $1,000 face value, a required rate of return of 8
percent, and semiannual compounding. What is one of these bonds worth today if they mature in
12 years?
A) $390.12
B) $360.27
C) $397.11
D) $376.89
E) $356.30
77) A U.S. Treasury bond has a face value of $5,000, a coupon rate of 3 percent compounded
semiannually, a yield to maturity of 2.97 percent, and 7 years until maturity. What is the clean
price quote of this bond?
A) $5,001.46
B) $5,013.33
C) $4,991.08
D) $4,996.72
E) $5,009.42
78) A Treasury bond is quoted at a price of 99.4062 with a current yield of 3.17 percent. What is
the coupon rate?
A) 3.315%
B) 3.068%
C) 3.151%
D) 3.077%
E) 3.102%
79) A $1,000 face value bond matures in 16 years, pays interest semiannually, and has a market
quote of 102.0562. The coupon rate is 5.5 percent, the current yield is ________ percent, and the
yield to maturity is ________ percent.
A) 5.39; 5.31
B) 5.61; 5.74
C) 5.42; 5.28
D) 5.78; 5.84
E) 5.44; 5.61
80) A $1,000 face value bond has a bid quote of 100.6794 and a bid-ask spread of 0.0155. If you
were to purchase this bond, what clean price would you pay?
A) $1,011.23
B) $1,004.33
C) $1,009.18
D) $1,006.95
E) $1,008.56
81) A $5,000 face value bond has a bid quote of 99.8742 and a bid-ask spread of 0.1356. What
price will you receive if you sell this bond today? Ignore any accrued interest or trading costs.
A) $998.74
B) $1,000.10
C) $5,009.02
D) $4,993.71
E) $5,010.27
82) Atlas bonds have a face value of $1,000, mature in 4 years, pay interest semiannually, and have
a coupon rate of 4.5 percent. The next interest payment will be paid 2 months from today. What is
the clean price of this bond if the market rate of return is 5.1 percent?
A) $656.57
B) $978.54
C) $971.08
D) $663.01
E) $993.55
83) LIAS Inc. bonds have a face value of $1,000, mature in 17 years, pay interest semiannually,
and have a coupon rate of 6.35 percent. The next interest payment will be paid 4 months from
today. What is the clean price of this bond if the market rate of return is 6.5 percent?
A) $995.28
B) $993.40
C) $989.55
D) $979.45
E) $984.70
84) Toy World bonds have a face value of $1,000, mature in 12 years, pay interest semiannually,
and have a coupon rate of 7.2 percent. The next interest payment will be paid 4 months from today.
What is the dirty price of this bond if the market rate of return is 7.4 percent?
A) $996.27
B) $972.27
C) $978.14
D) $984.27
E) $993.14
85) A 5-year bond has a face value of $1,000, matures in 5 years, pays interest semiannually, and
has a coupon rate of 6.35 percent. The next interest payment will be paid 2 months from today.
What is the dirty price of this bond if the market rate of return is 6.2 percent?
A) $985.20
B) $993.70
C) $1,006.37
D) $1,027.54
E) $1,014.10
86) You are purchasing a bond with a face value of $3,000 and a coupon rate of 5.45 percent. The
bond pays interest semiannually and has a yield to maturity of 5.51 percent. The bond matures in
7.5 years and pays its next interest payment in 4 months. What amount of accrued interest must
you pay to purchase this bond today?
A) $25.50
B) $27.25
C) $51.00
D) $37.75
E) $54.50
87) A bond that pays interest annually yields a rate of return of 8.74 percent. The inflation rate for
the same period is 2.48 percent. What is the actual real rate of return on this bond?
A) 5.79%
B) 5.87%
C) 6.11%
D) 6.04%
E) 5.91%
88) Roy's Welding's bond has an annual rate of return of 5.97 percent and a face value of $1,000.
The current rate of inflation is 3.02 percent. What is the real rate of return on these bonds?
A) 3.31%
B) 2.86%
C) 3.09%
D) 3.48%
E) 2.94%
89) Assume a bond yields a real rate of return of 3.6 percent during a time when inflation is 1.87
percent. What would the actual nominal rate of return be?
A) 5.61%
B) 5.47%
C) 5.49%
D) 5.54%
E) 5.57%
90) If the nominal rate of return on a bond is 7.47 percent and the real rate is 3.49 percent, what is
the rate of inflation?
A) 3.85%
B) 3.92%
C) 3.98%
D) 10.96%
E) 11.22%
91) You require a 3.2 percent real rate of return. If the inflation rate is 3.6 percent, what nominal
rate must you earn?
A) 6.80%
B) 6.92%
C) 6.85%
D) 6.88%
E) 6.95%
