Author Question: Quigley Inc.s bonds currently sell for $1,290 and have a par value of $1,000. They pay a $110 annual ... (Read 43 times)

Bobvance · **on:** Aug 7, 2023

Question 1

O’Brien Ltd.’s outstanding bonds have a $1,000 par value, and they mature in 20 years. Their nominal yield to maturity is 8.9%, they pay interest semiannually, and they sell at a price of $870. What is the bond’s nominal (annual) coupon interest rate?

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7.25%

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7.50%

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7.85%

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8.10%

Question 2

Quigley Inc.’s bonds currently sell for $1,290 and have a par value of $1,000. They pay a $110 annual coupon and have a 13-year maturity, but they can be called in 5 years at $1,186. What is their yield to maturity (YTM)?

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7.44%

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7.70%

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8.03%

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8.28%

heathercab · **Reply #1 on:** Aug 7, 2023

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