20mg

Suppose the following bond quotes for IOU Corporation appear in the financial page of today’s newspaper. Assume the bond has a face value of $1,000, makes semi-annual coupon payments, and the current date is October 31, 2017. Company Ticker Coupon Rate Maturity Last Price (% of par) Last Yield Est Vol (000s) IOU 7.1 October 31, 2035 104.21 ??? 2,321 What is the current yield on the bond given in the quote (for IOU Corporation)?

Suppose the following bond quotes for IOU Corporation appear in the financial page of today’s newspaper. Assume the bond has a face value of $1,000, makes semi-annual coupon payments, and the current date is October 31, 2017. Company Ticker Coupon Rate Maturity Last Price (% of par) Last Yield Est Vol (000s) IOU 7.1 October 31, 2035 104.21 ??? 2,321 What is the yield to maturity on the bond?

An investment offers a(n) 8.4% total return over the coming year. Bill Bernanke thinks the total real return on this investment will be only 7.4%. What does Bill believe the exact inflation rate will be over the next year?

Lycan, Inc. has 6.4% coupon bonds on the market that have 19 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 8.4%, what is the current bond price?

Suppose you buy a 10% coupon, 30-year bond today when it's first issued. If interest rates suddenly drop to 5%, what happens to the price of your bond? The price will rise. The price will fall. The price will not change.