1-Suppose you buy a 7 percent coupon, 20-year bond today when it’s issued. If interest rates suddenly rise to 15 percent, what happens to the value of your bond? Why?2-WMS, Inc., has 7 percent coupon bonds on the market that have 10 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 9 percent, what is the current bond price?3-Finley Co.has 10 percent coupon bonds on the market with nine years left to maturity. The bonds make annual payments. If the bond currently sells for $1,075.25, what is its YTM?4-Mustaine Enterprises has bonds on the market making annual payments, with 13 years to maturity, and selling for $850. At this price, the bonds yield 7.4%. What must the coupon rate be on Mustaine’s bonds?
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