Multiple choice

1.  If a bond is paying interest semi-annually, then:  

a. Interest is paid once a year 

b. Interest is paid every six months 

c. Interest is paid every three months 

d. None of the above 

2.  A 3-year bond with 10% coupon rate and $1000 face value yields 8% APR. Assuming annual coupon payment, calculate the price of the bond.  

a. $857.96 

b. $951.96 

c. $1000.00 

d. $1051.54 

3.  A 5-year treasury bond with a coupon rate of 8% has a face value of $1000. What is the semi-annual interest payment?  

a. $80 

b. $40 

c. $100 

d. None of the above 

4.  A three-year bond has 8.0% coupon rate and face value of $1000. If the yield to maturity on the bond is 10%, calculate the price of the bond assuming that the bond makes semi-annual coupon interest payments.  

a. $857.96 

b. $949.24 

c. $1057.54 

d. $1000.00