Consider the following yields to maturity on various one-year zero-coupon securities: SecurityYield (%)Treasury4.6AAA corporate4.8BBB corporate5.6B Corporate6.2The price (expressed as a percentage of the face value) of a one-year, zero-coupon corporate bond with a BBB rating is closest to:a.92.70b.95.60.c.94.16.d.94.70.e.95.42.

Consider a zero-coupon bond with a $1000 face value and 10 years left until maturity. If the bond is currently trading for $459, then the yield to maturity on this bond is closest to:a.9%b.7.5%.c.10.4%.d.8.1%.e.9.7%.

The following table summarizes prices of various default-free zero-coupon bonds (expressed as a percentage of face value): Maturity (years)12345Price (per $100 face value)94.5289.6885.4081.6578.35The yield to maturity for the two-year zero-coupon bond is closest to:a.5.8%.b.5.1%.c.5.5%.d.5.6%.e.6.0%.

ABC Industries issued a 5-year, 6% annual coupon bond with a par value of USD 1,000 two years ago.  At the time of issuance, the yield to maturity was 7%.  Recently, due to an increase in market interest rates, the new yield to maturity on the bond is 7.75%.  The current price of the bond is closest to:AUSD 974BUSD 930CUSD 955

Exactly one year ago, an investor purchased a $100 face value zero coupon bond with 4 years to maturity. The market yield to maturity at that time was 6% p.a. compounded semi-annually. Now, one year later, with the market yield to maturity decreases to 5% p.a., the same investor purchases another security that pays a stream of cash flows of $3 every six months for 3 years and with no face value. The combined current value of both investments (i.e., the zero coupon bond bought one year ago and the new security bought today) based on the current market yield to maturity is likely to be:A.ZeroB.Greater than the par valueC.Less than the par valueD.Equal to the par value

A long-term zero coupon bond with 3-year maturity, and bond’s market yield was 8% p.a.compounded semi-annually with $100 face value, the price of the zero coupon bond isand the duration of this bond is .