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102.
A Treasury bond is quoted as 99:18 asked and 99:09 bid. What is the bid-
ask spread in dollars on a $5,000 face value bond?
103.
The semiannual, 8-year bonds of Alto Music are selling at par and have an
effective annual yield of 8.6285 percent. What is the amount of each
interest payment if the face value of the bonds is $1,000?
104.
A bond that pays interest annually yielded 7.47 percent last year. The
inflation rate for the same period was 4 percent. What was the actual real
rate of return on this bond for last year?
105.
Getty Markets has bonds outstanding that pay a 5 percent semiannual
coupon, have a 5.28 percent yield to maturity, and a face value of $1,000.
The current rate of inflation is 4.1 percent. What is the real rate of return on
these bonds?
106.
The outstanding bonds of Winter Time Products provide a real rate of return
of 5.6 percent. The current rate of inflation is 4.68 percent. What is the
actual nominal rate of return on these bonds?
107.
The yield to maturity on a bond is currently 8.46 percent. The real rate of
return is 3.22 percent. What is the rate of inflation?
108.
A zero coupon bond with a face value of $1,000 is issued with an initial
price of $212.56. The bond matures in 22 years. What is the implicit interest,
in dollars, for the first year of the bond's life?
109.
Northern Warehouses wants to raise $11.4 million to expand its business.
To accomplish this, it plans to sell 40-year, $1,000 face value, zero-coupon
bonds. The bonds will be priced to yield 8.75 percent. What is the minimum
number of bonds it must sell to raise the $11.4 million it needs?
110.
You have won a contest and will receive $2,500 a year in real terms for the
next 3 years. Each payment will be received at the end of the period with
the first payment occurring one year from today. The relevant nominal
discount rate is 6.3 percent and the inflation rate is 3.1 percent. What are
your winnings worth today?
111.
You purchased an investment which will pay you $8,000, in real dollars, a
112.
Sylvan Trees has a 7 percent coupon bond on the market with ten years left
to maturity. The bond makes annual payments and currently sells for
$842.10. What is the yield-to-maturity?
113.
Kaiser Industries has bonds on the market making annual payments, with
14 years to maturity, and selling for $1,382.01. At this price, the bonds yield
7.5 percent. What is the coupon rate?
114.
Dexter Mills issued 20-year bonds a year ago at a coupon rate of 10.2
percent. The bonds make semiannual payments. The yield-to-maturity on
these bonds is 9.2 percent. What is the current bond price?
115.
Soo Lee Imports issued 17-year bonds 2 years ago at a coupon rate of 10.3
percent. The bonds make semiannual payments. These bonds currently sell
for 102 percent of par value. What is the yield-to-maturity?
116.
Bryceton, Inc. has bonds on the market with 13 years to maturity, a yield-to-
maturity of 9.2 percent, and a current price of $802.30. The bonds make
semiannual payments. What is the coupon rate?
117.
Suppose the real rate is 9.5 percent and the inflation rate is 1.8 percent.
What rate would you expect to see on a Treasury bill?
