solution

If a corporate bond that pays a $30 semiannual coupon payment has an annual yield to maturity of 8%, a par value of $1,000, and 10 years to maturity, what is the value of the bond today?

21. If the coupon rate is less than the yield-to-maturity for a bond, then the bond will be a:
a. Discount bond
b. Par value bond
c. Premium bond
22. Holding all else equal, for a premium bond, as the maturity date approaches, the value of the bond
a. decreases to the par value.
b. stays the same.
C. Increases to the par value.
23. A bond for Telehut is a callable bond that is currently selling for $1,020. It pays a semiannual coupon based on a 6% annual coupon rate and has 10 years to maturity, The par value for the bond is $1,000. It is callable in three years at call price of $1,060. What is the yield-to-maturity for the bond? What is the yield-to-call for the bond?

 
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