36.

Bond Quotes Consider the following three bond quotes; a Treasury note quoted at
87:25, and a corporate bond quoted at 102.42, and a municipal bond quoted at
101.45. If the Treasury and corporate bonds have a par value of $1,000 and the
municipal bond has a par value of $5,000, what is the price of these three bonds in
dollars?

A. $872.50, $1,000, $1,000, respectively

B. $1000, $1,000, $1,000, respectively
C. $877.81, $1,024.20, $5,072.50, respectively
D. $1,000, $1,024.20, $1,001.45, respectively

Treasury note at 87:25: (87 + 25/32)% $1,000 = $877.8125

Corporate bond at 102.42: 102.42% $1,000 = $1,024.20
Municipal bond at 101.45: 101.45% $5,000 = $5,072.50

38. Zero Coupon Bond Price Calculate the price of a zero coupon bond that matures
in 10 years if the market interest rate is 6 percent. (Assume semi-annual
compounding and $1,000 par value.)

A. $553.68
B. $558.66
C. $940.00
D. $1,000.00

Use semi-annual compounding:

Current Yield What's the current yield of a 6 percent coupon corporate bond quoted at
a price of 101.70?

A. 5.9 percent
B. 6.0 percent
C. 6.1 percent
D. 10.2 percent
6% 101.7% = 0.058997 = 5.9%
Yield to Maturity A 5.75 percent coupon bond with 12 years left to maturity is offered
for sale at $978.83. What yield to maturity is the bond offering? (Assume interest
payments are paid semi-annually and par value is $1,000.)

A. 3.00 percent
B. 3.09 percent
C. 5.75 percent
D. 6.00 percent
N = 24, PV = -978.83, PMT = 28.75, FV = 1000, CPT I = 3%, YTM = 3% 2 = 6%