The price of a 36-year zero-coupon bond is 80% of its face value. A second bond, with the same price, same face value, and same annual effective yield rate, offers annual coupons with the coupon rate equal to 4 9 of the annual effective yield rate.

Calculate the number of years until maturity for the second bond.

• 45
• 54
• 63
• 72
• 81

A bank issues two 20-year par-value bonds providing annual coupons. Each bond sells for the same price and provides an annual effective yield rate of 6.5%. The first bond has a redemption value of 6000 and a coupon of 7.6% paid annually. The second bond has a redemption value of 7500 and a coupon of r% paid annually.

Calculate r.

• 5.6
• 5.9
• 6.1
• 6.7
• 7.2

You are given the following information about Bond X and Bond Y:

i) Both bonds are 20-year bonds.

ii) Both bonds have face amount 1500.

iii) Both bonds have an annual nominal yield rate of 7% compounded semiannually.

iv) Bond X has an annual coupon rate of 10% paid semiannually and a redemption value C .

v) Bond Y has an annual coupon rate of 8% paid semiannually and a redemption value C+K

vi) The price of Bond X exceeds the price of Bond Y by 257.18.

Calculate K.

• 380−
• 88−
• 0
• 235
• 250

A four-year 1000 face amount bond, with an annual coupon rate of 5% paid semiannually, has redemption value of C. It is bought at a price to yield an annual nominal rate of 6% convertible semiannually. If the term of the bond had been two years, the purchase price would have been 7% less.

Calculate C.

• 455
• 469
• 541
• 611
• 626

Kate buys a five-year 1000 face amount bond today with a 100 discount. The annual nominal coupon rate is 5% convertible semiannually. One year later, Wallace buys a four-year bond. It has the same face amount and coupon values as Kate’s and is priced to yield an annual nominal interest rate of 10% convertible semiannually. The discount on Wallace’s bond is D. The book value of Kate’s bond at the time Wallace buys his bond is B.

Calculate B – D.

• 724
• 738
• 756
• 838
• 917

Bond A is a 15-year 1000 face amount bond with an annual coupon rate of 9% paid semiannually. Bond A will be redeemed at 1200 and is bought to yield 8.4% convertible semiannually. Bond B is an n-year 1000 face amount bond with an annual coupon rate of 8% paid quarterly. Bond B will be redeemed at 1376.69 and is bought to yield 8.4% convertible quarterly. The two bonds have the same purchase price.

Calculate n.

• 12
• 14
• 15
• 16
• 18

An 18-year bond, with a price 61% higher than its face value, offers annual coupons with the coupon rate equal to 2.25 times the annual effective yield rate. An n-year bond, with the same face value, coupon rate, and yield rate, sells for a price that is 45% higher than its face value.

• 10
• 12
• 14
• 17
• 20

Calculate n.

A ten-year bond paying annual coupons of X has a face amount of 1000, a price of 450, and an annual effective yield rate of 10%. A second ten-year bond has the same face amount and annual effective yield rate as the first bond. This second bond pays semi-annual coupons of X/2. The price of the second bond is P.

Calculate P.

• 439
• 442
• 452
• 457
• 461

Let P(0, t) be the current price of a zero-coupon bond that will pay 1 at time t. Let X be the value at time n of an investment of 1 made at time m, where m < n. Assume all investments earn the same interest rate.

Determine X.

• [[math]]\frac{P(0, m)}{P(0, n)}-1[[/math]]
• [[math]]\frac{P(0, n)}{P(0, m)}+1[[/math]]
• [[math]]\frac{P(0, m)}{P(0, n)}+1[[/math]]
• [[math]]\frac{P(0, m)}{P(0, n)}[[/math]]
• [[math]]\frac{P(0, n)}{P(0, m)}[[/math]]

A three-year bond with face amount X and a coupon of 4 paid at the end of every six months is priced at 90.17. A three-year bond with face value of 1.6X and a coupon of 4 paid at the end of every six months is priced at 132.47. Both have the same yield rate.

Calculate the annual nominal yield rate, convertible semiannually.

• 6%
• 8%
• 9%
• 11%
• 12%