Multiple choice

1-Consider a zero-coupon bond with a $1000 face value and 10 years left until maturity. If the YTM of this bond is 10.4%, then the price of this bond is closest to: 

$1000 

$602 

$1040 

$372 

2-Use the following information to answer the question(s) below. Suppose the current zero-coupon yield curve for risk-free bonds is as follows: The price per $100 face value of a three-year, zero-coupon, risk-free bond is closest to: 

$93.80 

$90.06 

$89.1 

$86.39 

3-Use the information for the question(s) below. The Sisyphean Company has a bond outstanding with a face value of $1000 that reaches maturity in 15 years. The bond certificate indicates that the stated coupon rate for this bond is 8% and that the coupon payments are to be made semiannually. How much will each semiannual coupon payment be? 

$60 

$40 

$120 

$80

4-Consider the following investment alternatives:

Investment               compounding

A            6.25%       annually

B-           6.10%         daily

C-           6.125          quarterly

D-            6.120           monthly   

1-Which alternative offers you the lowest effective rate of return?

Investment A   

Investment B   

Investment C   

Investment D