Question
In: Finance
Consider the following semiannual bonds: Bond &nbs
Consider the following semiannual bonds:
Bond Coupon Years to maturity Yield
1 4% 5 6.0%
2 6.5% 6 4.5%
a. Calculate the price per $100 par value for each bond.
b. If bond 2 is callable at 104.5 after 3 years, what is the yield to call?
c. What would have to happen for you to actually earn the yield to maturity on these bonds?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
2. Consider the following 3 semiannual bonds with par $1,000: Bond A: 5-year bond with coupon...
2. Consider the following 3 semiannual bonds with par
$1,000:
Bond A: 5-year bond with coupon rate 6%
Bond B: 10-year bond with coupon rate 6%
Bond C: 10-year bond with coupon rate 10%
Step 1: (1.5 points)
Calculate the prices of Bond A, Bond B, and Bond C based on the
required yield=7%.
Bond A =
Bond B =
Bond C =
Step 2: (3 points)
For each bond (Bond A, Bond B, or Bond C), conduct a scenario...
Bond valuationlong dash—Semiannual interest Calculate the value of each of the bonds shown in the following...
Bond
valuationlong dash—Semiannual
interest Calculate the value of each of the bonds shown in the
following table, all of which pay interest semiannually. (Click
on the icon located on the top-right corner of the data table
below in order to copy its contents into a spreadsheet.)
Bond
Par Value
Coupon
interest rate
Years to
maturity
Required stated
annual return
Copy to Clipboard
+
Open in Excel
+
A
$1 comma 0001,000
88
%
1111
99
%
B
500500
1212
2020...
Bond valuationlong dash—Semiannual interest Calculate the value of each of the bonds shown in the following...
Bond
valuationlong dash—Semiannual
interest Calculate the value of each of the bonds shown in the
following table, all of which pay interest semiannually. (Click
on the icon located on the top-right corner of the data table
below in order to copy its contents into a spreadsheet.)
Bond
Par Value
Coupon
interest rate
Years to
maturity
Required stated
annual return
A
$1 comma 0001,000
1111
%
1010
1010
%
B
1 comma 0001,000
1111
2020
1414
C
100100
1515
66
1616...
A portfolio has 3 bonds with semiannual payments of interest. Bond 1 Bond 2 Bond 3...
A portfolio has 3 bonds with semiannual payments of
interest.
Bond 1
Bond 2
Bond 3
Face Value
11000
15000
12000
Coupon
12%
15%
10%
Maturity (Yrs)
3
5
4
Yield
10%
9%
7%
Calculate the yield for this portfolio. (assume that interest is
paid in the same dates for the 3 bonds).
Bond prices. Price the bonds from the following table with semiannual coupon LOADING... payments. Par Value...
Bond prices. Price the bonds from the following table
with semiannual coupon
LOADING...
payments.
Par Value
Coupon Rate
Years to
Maturity
Yield to
Maturity
Price
$5 ,000.00
10%
20
11%
?
$1 ,000.00
9%
20
6%
?
$1 ,000.00
6%
15
7%
?
$5 ,000.00
5%
20
9%
?
Consider a 3-year 8% semiannual coupon bond. The YTM of this bond is 6%. Compute the...
Consider a 3-year 8% semiannual coupon bond. The YTM of this
bond is 6%. Compute the following
a) Macaulay Duration (use Mac Duration =
b) Modified Duration
c) Effective duration (assume a ±50 BP change of Yield)
d) Convexity Factor (use
e) Effective Convexity Factor (assume a ±50 BP change of
Yield)
PLEASE ANSWER ALL PARTS
You are considering a corporate bond with 10% coupon bonds with semiannual payments and a yield...
You are considering a corporate bond with 10% coupon bonds with
semiannual payments and a yield to maturity of 11% . The bonds
mature in 9 years. What is the market price per bond if the face
value is $1,000? (Round answers to two decimals, enter answer
without $ or "," , such as 1234.78)
Assume that an investor is looking at two bonds: Bond A is a 10-year, 12% (semiannual...
Assume that an investor is looking at two bonds: Bond A is a
10-year, 12% (semiannual pay) bond that is priced to yield 13.5
%. Bond B is a 10-year, 11% (annual pay) bond that is priced to
yield 10.5%. Both bonds carry 5-year call deferments and call
prices (in 5 years) of $1,075.
a. Which bond has the higher current yield?
b. Which bond has the higher YTM?
c. Which bond has the higher YTC?
Consider the following bonds: · Bond “LUKE” is a 3-year bearing coupon bond of 5% every...
Consider the following bonds: · Bond “LUKE” is a 3-year bearing
coupon bond of 5% every six-months with a face value of $1,000.
Coupon payments of $50 are made every 6 months. · Bond “ROUGE” is a
3-year bearing coupon bond of 12% per year with a face value of
$1,000. Coupon payments of $120 are made every 12 months. · Suppose
that the yield on the bond is 6% per annum with continuous
compounding.
a) Calculate the bond’s price,...
i) Consider a semiannual bond with an 8% coupon and with yield to maturity 10%. If...
i) Consider a semiannual bond with an 8% coupon and with yield
to maturity 10%. If the bond’s YTM remains constant, then in one
year, will the bond price be higher, lower, of unchanged? Why?
ii) Brothers Corp expects to earn $6 per share next year. The
firm’s ROE is 15% and its plowback ratio is 50%. If the firm’s
market capitalization rate is 13%, what is the present value of its
growth opportunities?
iii) Finance Corporation’s free cash flow...
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