1.

The $1,000 face value ABC bond has a coupon rate of 6%, with interest paid semi-annually, and matures in
5 years. If the bond is priced to yield 8%, what is the bond's value today?
o FV = $1,000
o CF = $60/2 = $30
o N = 5 x 2 = 10
o i = 8%/2 = 4%
o PV = $918.89
2. The $1,000 face value EFG bond has a coupon of 10% (paid semi-annually), matures in 4 years, and has
current price of $1,140. What is the EFG bond's yield to maturity?
o FV = $1,000
o CF = $100/2 = $50
o N=4x2=8
o PV = $1,140
o i = 3%
o yield-to-maturity = 3% x 2 = 6%
3. The HIJ bond has a current price of $800, a maturity value of $1,000, and matures in 5 years. If interest is
paid semi-annually and the bond is priced to yield 8%, what is the bond's annual coupon rate?
o PV = $800
o FV = $1,000
o N = 5 x 2 = 10
o i = 8% / 2 = 4%
o CF = $15.34
o Coupon = $30.68 per year or 3.068%
4. The KLM bond has a 8% coupon rate (with interest paid semi-annually), a maturity value of $1,000, and
matures in 5 years. If the bond is priced to yield 6%, what is the bond's current price?
o CF = $40
o FV = $1,000
o N = 10
o i = 6%/2 = 3%
o PV = $1,085
5. The NOP bond has an 8% coupon rate (semi-annual interest), a maturity value of $1,000, matures in 5
years, and a current price of $1,200. What is the NOP's yield-to-maturity?
o CF = $40
o FV = $1,000
o N = 5 x 2 = 10
o PV = $1,200
o i = 1.797%
o yield-to-maturity = 1.797% x 2 = 3.594%