Final Exam (12/13/17)-110 mins 8. The price of a bond is computd as the atio of

Question

Final Exam (12/13/17)-110 mins 8. The price of a bond is computd as the atio of the au coepon payment to the marke A. nominal yield B current yield C. yield to maturity D. yield to call 9. Abond has apur value orsi,00, atime to maturityedt0 years, and ucoupnrat of8%with over the next year? ieterest paid ansually. If the eument market prnce is $50, what is the capital pais yield of this bond 2% 13. 1.85% C.2.58% D.3.42% 1O. You can be sure dhat a bod wsel t a preaium to par whoe its coupon rate is e ter thus its yield maturity its coupon rate is to then its yield to murity its cospon rate is equal to its yield to maturity D. its coupoe rate is less than 11.A price affer a specific date bond gives the issser a to retire the bond before maturity at a specific A calable b Puttable D Treasury

Explanation / Answer

First question is answered below

1. Correct option: Current yield

Reason: The current yield of a bond is the ratio of coupon payment of bond to its market price.

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