Finance Exam Review Npr Irr
Fin 221 Fall 2006 Exam 3
Multiple Choice
Identify the choice that best completes the statement or answers the question.
1) Ken Williams Ventures' recently issued bonds that mature in 15 years. They have a par value of $1,000 and an annual coupon of 6%. If the current market interest rate is 8%, at what price should the bonds sell?
|A. |$801.80 |
|B. |$814.74 |
|C. |$828.81 |
|D. |$830.53 |
|E. |$847.86 |
2) Brown Enterprises' bonds currently sell for $1,025. They have a 9-year maturity, an annual coupon of $80, and a par value of $1,000. What is their yield to maturity?
|A. |6.87% |
|B. |7.03% |
|C. |7.21% |
|D. |7.45% |
|E. |7.61% |
3) Kholdy Inc's bonds currently sell for $1,275. They pay a $120 annual coupon and have a 20-year maturity, but they can be called in 5 years at $1,120. Assume that no costs other than
Multiple Choice
Identify the choice that best completes the statement or answers the question.
1) Ken Williams Ventures' recently issued bonds that mature in 15 years. They have a par value of $1,000 and an annual coupon of 6%. If the current market interest rate is 8%, at what price should the bonds sell?
|A. |$801.80 |
|B. |$814.74 |
|C. |$828.81 |
|D. |$830.53 |
|E. |$847.86 |
2) Brown Enterprises' bonds currently sell for $1,025. They have a 9-year maturity, an annual coupon of $80, and a par value of $1,000. What is their yield to maturity?
|A. |6.87% |
|B. |7.03% |
|C. |7.21% |
|D. |7.45% |
|E. |7.61% |
3) Kholdy Inc's bonds currently sell for $1,275. They pay a $120 annual coupon and have a 20-year maturity, but they can be called in 5 years at $1,120. Assume that no costs other than