# coupon yield curve for risk-free bonds

November 7, 2019
###### the long-run growth rate
November 7, 2019

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