Carol plans to invest in a 12 year bond issued by Iris Ltd that pays a coupon of 4.8 percent. Coupon payments are made semi-annually. If the current market rate is 6.4 percent, what is the maximum amount Carol should be willing to pay for this bond? Assume it has a par value of $1000.

Linda is interested in purchasing a corporate bond that was issued with an 8% annual coupon a semiannual interest payment of $40, and maturity in fifteen years. What is the par value of this bond?

Dolores has a 5-year investment horizon. She is considering purchasing an 8-year, 6% coupon bond (annually). Coupon payments are paid every six months and the bond has a face value of €1,000. The bond sells to offer a yield to maturity of 6% and therefore the price is €1,000. Dolores expects to be able to reinvest in the coupon payments at an annual interest rate of 5%. At the end of the planned investment horizon, the bond will be selling to offer a yield to maturity of 5% annually. What is the interest-on-interest amount to the closest cent.

Bill Mitselfik wants to buy a bond. It has a face value of $50,000, a bond rate of 6% (nominal), payable semi- annually, and matures in 10 years. Bill wants to earn a nominal interest of 8%. How much should Bill pay for the bond?

Baghiben