Finance 301 Key PASSED Exam Questions and CORRECT Answers
A $1000 par value bond will mature in 10 years. This bond pays a coupon of $90 every year. If investors require an annual return of 8%, what is the current price of this bond? Assume annual payments.$1,067.10 You wish to purchase a 20-year bond that has a maturity value of $1000 and makes semiannual interest payments of $40. If you require a 10% yield to maturity on this investment, what is the maximum price you would pay for the bond?$828.41 A bond with a $1,000 par value pays a coupon of $40 every six months. The bond has 12 years until maturity and a required return of 8%. If the required return suddenly dropped to 6%, what would be the percentage change in the bond's price?16.94%
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