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Coupon Rate as mentioned is 8.750% Payment Frequency is Semi Annually meaning payment to be done...

  • Coupon Rate as mentioned is 8.750%
  • Payment Frequency is Semi Annually meaning payment to be done two times in a year.
  • Offering Date is 01/05/1983
  • Maturity Date is 01/15/2023
  • Offering Price is $99.45
  • FV = 100
  • Trading Price = 105.06

A. Using the offering price found in step 3 and assuming the FV = 100 what is the YTM of your bond on offering (This means compute the YTM as if today was the offering date, show all work).

B. Compute the using the information found in step 3, compute the current YTM.

Solutions

Expert Solution

Note: Since, trading price date is not mentioned. I have assumed that the trading price is as of today

1) Price of Bond = Coupon1 / (1+YTM)1 + Coupon2 / (1+YTM)2 + ........... + (Couponn + Face Value)/ (1+YTM)n

2)

jeff jeffy answered 2 years ago
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