2. Please calculate the following bond values, Yield to Maturity, current yield and capital gains. 1)...

2. Please calculate the following bond values, Yield to Maturity, current yield and capital gains.

1) Value of 10-year, 10% coupon, semiannual bond if rd = 13%.

2) Value of 10-year, 10% coupon, semiannual bond if rd = 7%.

3) Value of 10-year, 10% coupon, semiannual bond if rd = 10%.

4) YTM on a 10-year, 9% semi-annual coupon, $1,000 par value bond selling for $887

5) Current yield and capital gains for case

6) What is the relation between bond value and years remaining till maturity?

Expert Solution

As per rules I am answering the first 4 subparts of the question

1) Value of 10-year, 10% coupon, semiannual bond if rd = 13%.	$834.72
2) Value of 10-year, 10% coupon, semiannual bond if rd = 7%.	$1,213.19
3) Value of 10-year, 10% coupon, semiannual bond if rd = 10%.	$1,000.00
4) YTM on a 10-year, 9% semi-annual coupon, $1,000 par value bond selling for $887	10.88%

Workings

jeff jeffy answered 19 hours ago

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