PLEASE ANSWER ALL QUESTIONS I JUST WANT TO MAKE SURE I GOT THEM CORRECT NO WORK

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PLEASE ANSWER ALL QUESTIONS I JUST WANT TO MAKE SURE I GOT THEM CORRECT NO WORK NEEDED. THANK YOU SOO MUCH

6.         A callable bond with an original maturity of 20 years now has 15 years to mature. The bond was originally issued at par with a coupon rate of 12% and semiannual interest payments. The bond can be called 7 years from now at a 20 percent call premium. Calculate this bond’s yield-to-call and yield-to-maturity if the current price is $860.

A. YTC = 14.29%; YTM = 17,09%

B. YTC = 17.09%; YTM = 14.29%

C. None of the above

7.         Which of the following statements is most correct?

A. Junk bonds typically carry a lower yield to maturity than investment grade bonds

B. A debenture is a secured bond which is backed by some or all of the firm’s fixed assets

C. All else equal, subordinated bonds typically carry lower yields than mortgage bonds

D. None of the above statements is correct

8.         Assume you wish to purchase a bond with a 30-year maturity, a coupon rate of 10 percent, a face value of $1,000, and semiannual interest payments. If you require 9% yield to maturity, what is the present value of the bond?

A. $905.35

B. $1,102.74

C. $1,103.19

D. $1,149.63

9.         A bond has a coupon rate of 8%, a maturity of 10 years, a face value of $1,000, and makes semiannual payments. If the price is $9.34.96, what is the annual nominal yield to maturity on the bond?

A. 8.39%

B. 9.64%

C. 4.41%

D. none of the above

Explanation / Answer

Yield to Call = Annual Coupon + (Call Price – Market Price)/No. of years to call/(Call Price +       

                                                                                                            Market Price)/2

                    = 120 + (200-860)/7/(200+860)/2

                   = 120 + (-660) /7/530

                  = (120-94.285 )/530 = 0.0485 or 4.85%

Yield to maturity(YTM) = (C+(F-P)/n)/((F+P)/2

      C = Coupon payment = 120/2 = 60

      F = Face value = $1,000

     P = Price = $860

      n = Years to maturity = 15 years i.e 30 payments

Yield to Maturity = (60 + ($1000 - $860)/30)/($1000+$860)/2

= (60 + 4.66)/ 930 = 64.66/930 = 0.0695 or 6.95%

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