You are given the following information about two bonds, Bond A and Bond B:

• Each bond is a 10-year bond with semiannual coupons redeemable at its par value of 10,000, and is bought to yield an annual nominal interest rate of i, convertible semiannually.
• Bond A has an annual coupon rate of (i + 0.04), paid semiannually.
• Bond B has an annual coupon rate of (i – 0.04), paid semiannually
• The price of Bond A is 5,341.12 greater than the price of Bond B.

Calculate i

• 0.042
• 0.043
• 0.081
• 0.084
• 0.086

Consider two 30-year bonds with the same purchase price. Each has an annual coupon rate of 5% paid semiannually and a par value of 1000. The first bond has an annual nominal yield rate of 5% compounded semiannually, and a redemption value of 1200. The second bond has an annual nominal yield rate of j compounded semiannually, and a redemption value of 800.

Calculate j.

• 2.20%
• 2.34%
• 3.53%
• 4.40%
• 4.69%

A 1000 par value 20-year bond sells for P and yields a nominal interest rate of 10% convertible semiannually. The bond has 9% coupons payable semiannually and a redemption value of 1200.

Calculate P.

• 914
• 943
• 1013
• 1034
• 1097

An investor purchases a 10-year callable bond with face amount of 1000 for price P. The bond has an annual nominal coupon rate of 10% paid semi-annually. The bond may be called at par by the issuer on every other coupon payment date, beginning with the second coupon payment date. The investor earns at least an annual nominal yield of 12% compounded semi-annually regardless of when the bond is redeemed.

Calculate the largest possible value of P.

• 885
• 892
• 926
• 965
• 982

An investor owns a bond that is redeemable for 300 in seven years. The investor has just received a coupon of 22.50 and each subsequent semiannual coupon will be X more than the preceding coupon. The present value of this bond immediately after the payment of the coupon is 1050.50 assuming an annual nominal yield rate of 6% convertible semiannually.

Calculate X.

• 7.54
• 10.04
• 22.37
• 34.49
• 43.98

A company plans to invest X at the beginning of each month in a zero-coupon bond in order to accumulate 100,000 at the end of six months. The price of each bond as a percentage of redemption value is given in the following chart:

Calculate X given that the bond prices will not change during the six-month period.

• 15,667
• 16,078
• 16,245
• 16,667
• 17,271

An investor purchased a 25-year bond with semiannual coupons, redeemable at par, for a price of 10,000. The annual effective yield rate is 7.05%, and the annual coupon rate is 7%.

Calculate the redemption value of the bond.

• 9,918
• 9,942
• 9,981
• 10,059
• 10,083

Jeff has 8000 and would like to purchase a 10,000 bond. In doing so, Jeff takes out a 10 year loan of 2000 from a bank and will make interest-only payments at the end of each month at a nominal rate of 8.0% convertible monthly. He immediately pays 10,000 for a 10-year bond with a par value of 10,000 and 9.0% coupons paid monthly.

Calculate the annual effective yield rate that Jeff will realize on his 8000 over the 10-year period.

• 9.30%
• 9.65%
• 10.00%
• 10.35%
• 10.70%

A bank issues three annual coupon bonds redeemable at par, all with the same term, price, and annual effective yield rate. The first bond has face value 1000 and annual coupon rate 5.28%. The second bond has face value 1100 and annual coupon rate 4.40%. The third bond has face value 1320 and annual coupon rate r.

Calculate r

• 2.46%
• 2.93%
• 3.52%
• 3.67%
• 4.00%

An investor owns a bond that is redeemable for 250 in 6 years from now. The investor has just received a coupon of c and each subsequent semiannual coupon will be 2% larger than the preceding coupon. The present value of this bond immediately after the payment of the coupon is 582.53 assuming an annual effective yield rate of 4%.

Calculate c.

• 32.04
• 32.68
• 40.22
• 48.48
• 49.45