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BUSI 530 CONNECT CHAPTER 6 HOMEWORK

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A 20-year Treasury bond is issued with face value of \$1,000, paying interest of \$52 per year. If market yields increase shortly after the T-bond is issued, what is the bond’s coupon rate?
A General Power bond with a face value of \$1,000 carries a coupon rate of 9.7%, has 9 years until maturity, and sells at a yield to maturity of 8.7%. (Assume annual interest payments.)
One bond has a coupon rate of 5.6%, another a coupon rate of 8.3%. Both bonds pay interest annually, have 6-year maturities, and sell at a yield to maturity of 7.0%.
General Matter’s outstanding bond issue has a coupon rate of 10.8%, and it sells at a yield to maturity of 8.75%. The firm wishes to issue additional bonds to the public at face value. What coupon rate must the new bonds offer in order to sell at face value?
Consider three bonds with 6.7% coupon rates, all making annual coupon payments and all selling at a face value of \$1,000. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and the long-term bond has maturity 30 years
The following table shows the prices of a sample of Treasury strips. Each strip makes a single payment at maturity. Calculate the interest rate offered by each of these strips.

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