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A bond makes two $45 interest payments each year. Given that the bond's per value is $1000 and its price is $1050, calculate the bond's coupon rate and coupon yield.

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Elin Hessel
Elin HesselLv2
28 Sep 2019

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A 5 year bond pays interest. The par value is $1000, and the coupon rate equals 7%. If the markets required return on the bond is 8%, then what is the bond's market price?

A bond that matures in two years makes semiannual interest payments. The par value is $1000, the coupon rate equals 4%, and the bond's market price is $1019.27. What is the bond's yield to maturity?

If a bond is currently trading at its face (par) value, then it must be the case that:

the bond's yield to maturity is less than its coupon rate.

the bond's yield to maturity is greater than its coupon rate.

the bond is a zero-coupon bond.

the bond's yield to maturity is equal to its coupon rate.

A 15-year bond with a face value of $1,000 currently sells for $850. Which of the following statements is CORRECT? Please explain how also.

Select one:

a. The bond's coupon rate exceeds its current yield.

b. The bond's current yield exceeds its yield to maturity.

c. The bond's yield to maturity is greater than its coupon rate. 

d. The bond's current yield is equal to its coupon rate.

e. If the yield to maturity stays constant until the bond matures, the bond's price will remain at $850.

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