What is the yield to maturity of bond with par value

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Reference no: EM131979548

1. A bond with a par value of $1,000 has a 6% coupon rate with semi-annual coupon payments made on July 1 and January 1. If the bond changes hands on November 1, which of the following is true with respect to accrued interest?

The buyer will pay the seller $20 of accrued interest

The seller will pay the buyer $20 of accrued interest

The buyer will pay the seller $10 of accrued interest

The seller will pay the buyer $10 of accrued interest

None of the above

2. What is the yield to maturity of a bond with a par value of $1,000, a 6% coupon rate with semi-annual payments, and 5 years to maturity if the bond sells for $1,100?

A. 14.68%

B. 11.35%

C. 8.50%

D. 3.79%

E. 1.89%

3. What is the price of a bond with a par value of $1,000, 11 years to maturity and a 7% coupon rate with semi-annual coupon payments if the bond has a yield to maturity of 4%?

A. $1,264.87

B. $1,262.81

C. $1,079.68

D. $1,000.00

E. $927.74

Reference no: EM131979548

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