Question

bond prices

par value,    coupon r, Year TM, Yield TM, Price
$1,000.000.          5%          20.            5%         ?
$1,000.000.          9%          30.            6%         ?
$5,000.000.          11%        25.            8%         ?
$5,000.000.           6%          5.             12%        ?

find the price for the bond in the following table:

Answer 1

1

K = N

Bond Price =∑ [(Annual Coupon)/(1 + YTM)^k]     +   Par value/(1 + YTM)^N

k=1

K =20

Bond Price =∑ [(5*1000/100)/(1 + 5/100)^k]     +   1000/(1 + 5/100)^20

k=1

Bond Price = 1000

2

K = N

Bond Price =∑ [(Annual Coupon)/(1 + YTM)^k]     +   Par value/(1 + YTM)^N

k=1

K =30

Bond Price =∑ [(9*1000/100)/(1 + 6/100)^k]     +   1000/(1 + 6/100)^30

k=1

Bond Price = 1412.94

3

K = N

Bond Price =∑ [(Annual Coupon)/(1 + YTM)^k]     +   Par value/(1 + YTM)^N

k=1

K =25

Bond Price =∑ [(11*5000/100)/(1 + 8/100)^k]     +   5000/(1 + 8/100)^25

k=1

Bond Price = 6601.22

4

K = N

Bond Price =∑ [(Annual Coupon)/(1 + YTM)^k]     +   Par value/(1 + YTM)^N

k=1

K =5

Bond Price =∑ [(6*5000/100)/(1 + 12/100)^k]     +   5000/(1 + 12/100)^5

k=1

Bond Price = 3918.57