Question
In: Economics
Interpreting Relations among Bond Price, Coupon, Yield, and Credit Rating The following appeared on Yahoo! Finance...
Interpreting Relations among Bond Price, Coupon, Yield, and Credit Rating
The following appeared on Yahoo! Finance (finance.yahoo.com) regarding outstanding bonds issued by Citigroup Inc.
Price Coupon (%) Maturity Yield to Maturity (%) Fitch Ratings
129.87 6.65 2028 3.725 A
114.41 4.950 2043 4.095 A
Questions:
A) Discuss the relation among the coupon, rate, price, and yield for the bond maturing in 2028.
B) Compare the yields on the two books. Why are the yields different when the credit ratings are the same?
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Go to a finance/investing site such as yahoo finance or the “investor relations” page of a...
Go to a finance/investing site such as yahoo finance or the
“investor relations” page of a company and find the annual report
(10K) for a public corporation. Describe and analyze examples from
the “Management’s Discussion and Analysis of Financial Condition
and Results of Operations”. Explain if the company is doing well or
not according to the management discussion and analysis for the
company Disneyland
If the yield of maturity of the bond is lower than the coupon rate, the price...
If the yield of maturity of the bond is lower than the coupon
rate, the price of this bond will be?
Select one:
a. Higher than the par value.
b. Lower than the par value.
c. Equal the par value.
The situation in which the current market price is greater than
intrinsic value is called:
Select one:
a. All answers are incorrect.
b. Equilibrium.
c. Stock undervalued.
d. Stock overvalued.
An investor is considering purchasing a 10-year zero-coupon bond
of...
A bond's credit rating provides a guide to its price. Assume Aaa bonds yield 4.1% and...
A bond's credit rating provides a guide to its price. Assume Aaa
bonds yield 4.1% and Baa bonds yield 5.1%. Assume a 10% five-year
bond with annual coupons and a face value of $1,000. (Do
not round intermediate calculations. Round your answers to 2
decimal places.)
a. What is the bond's price if it is rated as
Aaa?
Bond price
$
b. What is the bond's price if it is rated as
Baa?
Bond price
$
A bond's credit rating provides a guide to its price. Assume Aaa bonds yield 3.9% and...
A bond's credit rating provides a guide to its price. Assume Aaa
bonds yield 3.9% and Baa bonds yield 4.9%. Assume a 10% five-year
bond with annual coupons and a face value of $1,000. (Do
not round intermediate calculations. Round your answers to 2
decimal places.)
a. What is the bond's price if it is rated as
Aaa?
b. What is the bond's price if it is rated as
Baa?
Price and yield A 6% semiannual coupon bond matures in 4 years. The bond has a...
Price and yield A 6% semiannual coupon bond matures in 4 years.
The bond has a face value of $1,000 and a current yield of 6.6223%.
What is the bond's price? Round your answer to the nearest cent. $
What is the bond's YTM? Round your answers to two decimal places.
%
What is the percentage change in price for a zero coupon bond if the yield changes...
What is the percentage change in price for a zero coupon bond if
the yield changes from 5% to 8%? The bond has a face value of
$1,000 and it matures in 12 years. Use the price determined from
the first yield, 5%, as the base in the percentage calculation.
What is the percentage change in price for a zero coupon bond if the yield changes...
What is the percentage change in price for a zero coupon bond if
the yield changes from 6% to 7%? The bond has a face value of
$1,000 and it matures in 13 years. Use the price determined from
the first yield, 6%, as the base in the percentage
calculation.
What is the percentage change in price for a zero coupon bond if the yield changes...
What is the percentage change in price for a zero coupon bond if
the yield changes from 8.5% to 8%? The bond has a face value of
$1,000 and it matures in 15 years. Use the price determined from
the first yield, 8.5%, as the base in the percentage calculation.
The percentage change in the bond price if the yield changes from
8.5% to 8% is ____%. (Round to two decimal places.)
3. What is the percentage change in price for a zero coupon bond if the yield...
3. What is the percentage change in price for a zero coupon bond
if the yield changes from
9%
to
6%?
The bond has a face value of
$1,000
and it matures in
16
years. Use the price determined from the first yield,
9%,
as the base in the percentage calculation.
What is the percentage change in price for a zero coupon bond if the yield changes...
What is the percentage change in price for a zero coupon bond if
the yield changes from
8.5%
to
5.5%?
The bond has a face value of
$1,000
and it matures in
19
years. Use the price determined from the first yield,
8.5%,
as the base in the percentage calculation.
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