32.Suppose you are considering buying a six-year 10%coupon bond with a face value of $1,000 and a current price of $1,100.What are the current yield and yield to maturity of this bond? (a)CY=11.00%;YTM=12.23% (b)CY=12.23%,YTM=11.00% (c)CY=7.85%,YTM=9.09% (dCY=9.09%,YTM=7.85% Answer(d) 33.Suppose you are considering buying a seven-year 11%coupon bond with a face value of $1,000 and a current price of $950.What are the current yield and yield to maturity of this coupon bond? (a)CY=12.10%;YTM=11.58% (b)CY=11.58%,YTM=12.10% (c)CY=9.92%,YTM=10.45% (d)CY=10.45%,YTM=9.92% Answer:(b) 34.Over time bond prices their face value.Before maturity,bond prices can a great deal as a result of changes in market interest rates. (a)diverge from;fluctuate (b)converge toward:flatten out (c)converge toward;fluctuate (d)diverge from;flatten out Answer:(c) 35.When the yield curve is not flat,bonds of the same with different coupon rates have yields to maturity. (a)maturity,different (b)maturity,identical (c)callability,different (d)callability,identical Answer:(a) 8-98-9 32. Suppose you are considering buying a six-year 10% coupon bond with a face value of $1,000 and a current price of $1,100. What are the current yield and yield to maturity of this bond? (a) CY = 11.00%; YTM = 12.23% (b) CY = 12.23%; YTM = 11.00% (c) CY = 7.85%; YTM = 9.09% (d) CY = 9.09%; YTM = 7.85% Answer (d) 33. Suppose you are considering buying a seven-year 11% coupon bond with a face value of $1,000 and a current price of $950. What are the current yield and yield to maturity of this coupon bond? (a) CY = 12.10%; YTM = 11.58% (b) CY = 11.58%; YTM = 12.10% (c) CY = 9.92%; YTM = 10.45% (d) CY = 10.45%; YTM = 9.92% Answer: (b) 34. Over time bond prices ________ their face value. Before maturity, bond prices can ________ a great deal as a result of changes in market interest rates. (a) diverge from; fluctuate (b) converge toward; flatten out (c) converge toward; fluctuate (d) diverge from; flatten out Answer: (c) 35. When the yield curve is not flat, bonds of the same ________ with different coupon rates have ________ yields to maturity. (a) maturity, different (b) maturity, identical (c) callability, different (d) callability, identical Answer: (a)