Bonds sell at a premium when the market rate of interest is:

Giant Electronics is issuing 20-year bonds that will pay coupons semiannually. The coupon rate on this bond is 7.8 percent. If the market rate for such bonds is 7 percent, what will the bonds sell for today? (Do not round intermediate computations. Round your final answer to the nearest dollar.)

The U.S. Treasury has issued 10-year zero coupon bonds with a face value of $1,000. Assume that the bond compounds interest semiannually. What will be the current market price of these bonds if the yield to maturity for similar investments in the market is 6.75 percent? (Round your answer to the nearest dollar.)

Alice Trang is planning to buy a six-year bond that pays a coupon of 10 percent semiannually. Given the current price of $878.21, what is the yield to maturity on these bonds? (Round to the closest answer.)

Jeremy Kohn is planning to invest in a 10-year bond that pays a 12 percent coupon. The current market rate for similar bonds is 9 percent. Assume semiannual coupon payments. What is the maximum price that should be paid for this bond? (Do not round intermediate computations. Round your final answer to the nearest dollar.)

Which of the following statements is true?

Which of the following statements is true?

Stanley Hart invested in a municipal bond that promised an annual yield of 6.7 percent. The bond pays coupons twice a year. What is the effective annual yield (EAY) on this investment? (Round percentage to two decimal places.)

Which of the following statements is NOT true?

Which one of the following statements about bonds is NOT true?

Which of the following statements is true of zero coupon bonds?

Bonds sell at a discount when the market rate of interest is:

Sheridan Corp is issuing a 10-year bond with a coupon rate of 9 percent. The interest rate for similar bonds is currently 5 percent. Assuming annual payments, what is the value of the bond? (Round answer to 2 decimal places, e.g. 15.25.)

Generic Inc. issued bonds in 1988 that will mature 16 years from the date of issue. The bond pays a 14.375 percent coupon and the interest is paid semiannually. Its current price is $1,508.72. What is the yield to maturity on the bonds? (Round your answer to two decimal places.)

Ten-year zero coupon bonds issued by the U.S. Treasury have a face value of $1,000 and interest is compounded semiannually. If similar bonds in the market yield 12.0 percent, what is the value of these bonds? (Round answer to 2 decimal places, e.g. 15.25.)

In regard to interest rate risk, short-term bonds:

A bond with a $1,000 face value and an 8 percent annual coupon pays interest semiannually. The bond will mature in 15 years. The yield to maturity is 11 percent. The price of the bond should be: Do no round intermediate computations. Round the final answer to two decimal places.

A benefit of a callable bond is the:

University Corp. issued five-year bonds that pay a coupon of 6.5 percent semiannually. The current market rate for similar bonds is 5.5 percent. How much will you be willing to pay for the bond today? Do not round intermediate calculations. Round your answer to the nearest dollar.

Mary just bought a 20-year bond with an 8% coupon rate (paid semi-annually) and $1000 par value for $1050. She is expecting an effective annual yield (EAY) of: (Round to two decimal places.)

A bond pays a coupon interest rate of 7.5 percent. The market rate on similar bonds is 8.4 percent. The bond will sell at _____.

Carla Vista, Inc., has a bond issue maturing in seven years that is paying a coupon rate of 10.0 percent (semiannual payments). Management wants to retire a portion of the issue by buying the securities in the open market. If it can refinance at 8.5 percent, how much will Carla Vista pay to buy back its current outstanding bonds? (Round answer to 2 decimal places, e.g. 15.25.)

Pharoah, Inc., has outstanding bonds that will mature in six years and pay an 8 percent coupon semiannually. If you paid $994.13 today and your required rate of return was 7.3 percent. (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal places, e.g. 15.25.) How much should you have paid for the bond?

Pharoah, Inc., has outstanding bonds that will mature in six years and pay an 8 percent coupon semiannually. If you paid $994.13 today and your required rate of return was 7.3 percent. (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal places, e.g. 15.25.) Did you pay the right price for the bond?

The Oriole Department of Transportation has issued 25-year bonds that make semiannual coupon payments at a rate of 10.275 percent. The current market rate for similar securities is 10.1 percent. Assume that the face value of the bond is $1,000. What is the current market value of one of these bonds? (Round answer to 2 decimal places, e.g. 15.25.)

Which of the following theorems explains the relationship between interest rates and bond prices?

Carla Vista, Inc., has bonds outstanding that will mature in 8 years. The bonds have a face value of $1,000. These bonds pay interest semiannually and have a coupon rate of 4.6 percent. If the bonds are currently selling at $884.92, what is the yield to maturity that an investor who buys them today can expect to earn? (Round answer to 3 decimal place, e.g. 5.275%.) Yield to maturity

Carla Vista, Inc., has bonds outstanding that will mature in 8 years. The bonds have a face value of $1,000. These bonds pay interest semiannually and have a coupon rate of 4.6 percent. If the bonds are currently selling at $884.92, what is the effective annual yield? (Round answer to 3 decimal places, e.g. 5.275%.)

The yield to maturity for a bond is: