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1) J&J Manufacturing issued a bond with a $1,000 par value.  The bond has a coupon rate...

1) J&J Manufacturing issued a bond with a $1,000 par value.  The bond has a coupon rate of 6% and makes payments semiannually.  If the bond has 15 years remaining and the annual market interest rate is 7.2%, what will be bond sell for today?

A.  $1,435.93              B.  $789.12                 C.  $892.07                 D.  $891.02

2) The value of a bond can be found by

A.        Calculating the present value of an annuity (interest payments)

B.        Calculating the present value of a lump sum (the principal)

C.        None of the above

D.        Both A and B

3) You recently went into PNC bank and opened an account which pays an annual interest rate of 6.25% for the next four years.  Your initial deposit is $5,000 assumes interest is compounded quarterly.  How much will you have at the end of four years?

A. $3,997.84

B. $4,672.33

C. $5,704.37

D. $6,407.73

E. $7,304.52

SHOW CALCULATIONS AND EXPLANATIONS PLEASE

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Answer #1

If Semi Annual Coupon Nper Pmt Rate 15*2 1000*0.06*1/2 0.072*1/2 $ 30 30.00 0.036 1,000.00 L Pmt Nper Ру FV Rate payment Numb

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