Question

Par Value	Coupon Rate	Years to Maturity	Yield to Maturity	Price	Coupon Frequency
$5,000.00	?	5	10%	$4,620.92	annual
$1,000.00	?	15	5%	$1,000.00	semiannual
$1,000.00	?	5	11%	$923.34	monthly
$1,000.00	?	20	12%	$924.50	quarterly

Make sure to round all intermediate calculations to at least six decimal places.

Answer 1

K = N

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

k=1

K =5

4620.92 =∑ [(Coupon rate*5000/100)/(1 + 10/100)^k]     +   5000/(1 + 10/100)^5

k=1

Coupon rate% = 8

K = N

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

k=1

K =15

1000 =∑ [(Coupon rate*1000/100)/(1 + 5/100)^k]     +   1000/(1 + 5/100)^15

k=1

Coupon rate% = 5

K = Nx12

Bond Price =∑ [(Monthly Coupon)/(1 + YTM/12)^k]     +   Par value/(1 + YTM/12)^Nx12

k=1

K =5x12

923.34 =∑ [(Coupon rate*1000/1200)/(1 + 11/1200)^k]     +   1000/(1 + 11/1200)^5x12

k=1

Coupon rate% = 9

K = Nx4

Bond Price =∑ [(Quarterly Coupon)/(1 + YTM/4)^k]     +   Par value/(1 + YTM/4)^Nx4

k=1

K =20x4

924.5 =∑ [(Coupon rate*1000/400)/(1 + 12/400)^k]     +   1000/(1 + 12/400)^20x4

k=1

Coupon rate% = 11