Take HomeChapter 6 Quiz – Form AName 1. Calculate the price...

Question

Take HomeChapter 6 Quiz – Form AName                                        1. Calculate the price of a $1,000 par value bond that has a coupon rate of 7% and matures in 9 years.  Assume a discount rate of 8%.  Round your answer to the nearest penny.2. Calculate the yield to maturity on a 12-year bond that has a par value of $1,000 and a coupon rate of 5%.  Assume that you paid $975 for the bond.  Round your answer to 2 decimal places.3. Calculate the price of a $1,000 par value zero coupon bond that matures in 8 years.  Assume a discount rate of 7% and round your answer to the nearest penny.4. Calculate the price of a $100 par value share of prefeed stock.  The annual dividend is $90 and the discount rate is 6%.5. The safest bond is a             -rated bond.

Nakul · Accepted Answer

Assignment Solutions
Answer 1 
Given 
Face Value of Bond = $1000
Coupon Rate = 7%
Time to maturity = 9 years
Yield To maturity (YTM) = 8%
Price of Bond = Present value of coupon payments and present value of face value
Price of Bond = $937.

Take Home Chapter 6 Quiz – Form A Name 1. Calculate the price of a $1,000 par value bond that has a coupon rate of 7% and matures in 9 years. Assume a discount rate of 8%. Round your answer to the...

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