Question
In: Finance
Yield to maturity. What is the yield of each of the followingbonds,, if interest (coupon)...
Yield to maturity. What is the yield of each of the following bonds,, if interest (coupon) is paid semiannually?
a. What is the yield of the following bond if interest (coupon) is paid semiannually?
(Round to two decimal places.)
Par Value | Coupon Rate | Years to Maturity | Yield to Maturity | Price | ||
$5,000.00 | 11% | 30 | ? | $6,030.00 | ||
$5,000.00 | 8% | 5 | ? | $5,000.00 | ||
$1,000.00 | 12% | 5 | ? | $1,200.00 | ||
$1,000.00 | 6% | 20 | ? | $590.00 | ||
Solutions
Expert Solution
Ans:- we will use the RATE function of excel to find the YTM.
RATE function of excel is given by =RATE(nper,pmt,pv,fv), where nper is the number of periods, pmt is the periodic payment, pv is the price of the bond and fv is the future or par value of the bond.
Pmt is calculated by Par Value * coupon rate / 2.
jeff jeffy answered 2 years agoRelated Solutions
Yield to maturity. What is the yield of each of the following bonds, if interest (coupon)...
Yield to maturity. What is the yield of each of
the following bonds, if interest (coupon) is paid annually?
a. What is the yield of the following bond if interest (coupon)
is paid annually? (Round to two decimal places.)
Data Table
Par Value
Coupon Rate
Years to Maturity
Yield to Maturity
Price
$1,000.00
10%
30
?
$900.00
$5,000.00
6%
10
?
$5,300.00
$5,000.00
8%
10
?
$5,730.00
$1,000.00
7%
5
?
$800.00
Yield to maturity. What is the yield of each of the following bonds if interest (coupon)...
Yield to maturity. What is the yield of each of
the following bonds if interest (coupon) is paid
semiannually? (Round to two decimal places.)
Par Value
Coupon Rate
Years to
Maturity
Yield to
Maturity
Price
$1,000.00
12%
15
?______
$1,000.00
$5,000.00
11%
10
?______
$6,010.00
$5,000.00
8%
25
?______
$7,120.00
$1,000.00
7%
30
?______
$700.00
What is the yield of each of the following bonds if interest (coupon) is paid annually...
What is the yield of each of the following bonds if interest
(coupon) is paid annually ?
Par Value
Coupon Rate
Years to
Maturity
Yield to
Maturity
Price
$1,000.00
8%
20
?
$800.00
$1,000.00
9%
5
?
$1,000.00
$5,000.00
5%
30
?
$4,310.00
$5,000.00
7%
5
?
$4,260.00
Describe following for Bonds : coupon rate current yield Yield to maturity Which ones of the...
Describe following for Bonds :
coupon rate
current yield
Yield to maturity
Which ones of the above rates/yield can change over the life of
the bond and if yes, why? ( 10 points)
Research and find a bond for large blue chip company like
McDonald, Intel, GE or any other from Dow Jones 30 list. Provide
following ( and list source)
Bond information : Company, rating
Maturity date
Current price
Coupon rate %
Current yield %
Yield to Maturity (YTM)...
The yield to maturity on 1-year zero-coupon bonds is currently 6.5%; the yield to maturity on...
The yield to maturity on 1-year zero-coupon bonds is currently
6.5%; the yield to maturity on 2-year zeros is 7.5%. The Treasury
plans to issue a 2-year maturity coupon bond, paying coupons once
per year with a coupon of 8.5%. The face value of the bond is
$1,000.
At what price will the bond sell?
What will the yield to maturity on the bond be?
If the expectations theory of the yield curve is correct, what
is the market expectation...
What will be the relationship between coupon rate and yield to maturity for bonds selling at...
What will be the relationship between coupon rate and yield to
maturity for bonds selling at discount? Give reason to support your
answer.
1. What would be the yield to maturity for a bond with a $70 coupon, interest...
1. What would be the yield to maturity for a bond with a $70
coupon, interest paid semiannually, $1000 maturity value, 12 years
to maturity and a quoted price of 104.50 (Actual price of $1045)?
Remember we are taking the view of the investor, so the price needs
to be entered with a negative sign because if we buy the bond, that
is cash out of our account
2. If the quoted price fell to 99 (actual price $990), what...
what would be the yield to maturity for a bond with a $70 coupon, interest paid...
what would be the yield to maturity for a bond with a $70
coupon, interest paid semiannually, $1000 maturity value, 12 years
to maturity and a quoted price of 104.50 (Actual price of
$1045)?
Unilever has issued bonds that pay annually with the following characteristics: Coupon Yield to Maturity Maturity...
Unilever has issued bonds that pay annually with the following
characteristics:
Coupon
Yield to Maturity
Maturity
Macaulay Duration
3%
3%
30 years
27.92 years
Calculate modified duration using the information above.
Explain why modified duration is a better measure than maturity
when calculating the bond's sensitivity to changes in interest
rates.
Identify the direction of change in modified duration if:
The coupon of the bond were 2%, not 3%.
The maturity of the bond were 7 years, not 30 years.
Yield to Maturity [2 points]: A firm’s bonds make an annual coupon interest payment of 7.35%.
Show step by step using BAII plus CalculatorQuestion 4 - Yield to Maturity [2 points]: A firm’s bonds make
an annual coupon interest payment of 7.35%. The bonds have a par
value of $1,000, a current price of $1,130, and mature in 12 years.
What is the yield to maturity on these bonds?Question 5 – Zero Coupon Bond [2 points]: Consider a
zero-coupon bond with a $1000 face value and ten years left until
maturity. If the YTM of this...
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