Question

TABLE 6-7 Corporate Bond Market Quote 4 (5) (6 (7) (8) 9) (10) Most Active Investment Grade Bonds Issuer Name Symbol Coupon Maturity Moodys/S&P Fitch High Low Last Change Yield % GOLDMAN SACHS GROUP WESTPAC BKG CORP PHILIP MORRIS INTL INC GOLDMAN SACHS GROUP MORGAN STANLEY GOLDMAN SACHS GROUP WELLS FARGO&CO NEW MEDIUM TERM SR NTS EASTMAN CHEM CO GENERAL ELEC CAP CORP MEDIUM TERM NTS BO0 MORGAN STANLEY GS3956630 2.375% 01/22/2018 Α3/A-/A 100.307 98.554 98.878-0006 2.64 1 WBK3952102 1.600% 01/12/2018 Aa2/A/A- 98.645 98.293 98.433-0.156 1.967 PM3975964 2625%03/06/2023 A2/A/A 95.335 93.521 93.772 0.858 3.388 GS3956651 3.625% 01/22/2023 A3/A-/A 98.558 95.577 95.578-1.823 4.194 MS3997659 2.125% 04/25/2018 Baa1/A-/A 98.498 96.027 96.506-1.385 2.915 GS.JBZ 3.625% 02/07/2016 A3/A-/A 105.650103.699 104.932 0.141 1.642 1 WFC3946014 1.500% 01/16/2018 A2/A+/AA- 99.305 97.702 97.987-0.013 1.970 EMN3861 877 2.400% 06/01/2017 Baa2/BBB/BBB 101.189 100.847 100.847 0.062 2.170 GE3951255 3.100% 01/09/2023 A1/AA+/ 98.000 94, 152 94.293-0.081 3.824 MS.GDZ 5.950% 12/28/2017 Baa1/A-1A 112.723 111.002 112.083 0.373 3.022

Refer to Table 6–7.
a. What was the closing price on the Goldman Sachs 2.375 percent coupon bonds on July 16, 2013?
b. What was the S&P bond rating on Wells Fargo 1.500 percent coupon bonds maturing in 2018 on July 16, 2013?
c. What was the closing price on Morgan Stanley 5.950 percent bonds on July 15, 2013?

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Answer #1

Based on Table 6-7:

a) the closing price on Goldman Sachs 2.375% coupon bonds on Jul16, 2013 is 98.878%.

b) The S&P bond rating on wells fargo 1.5% coupon bonds maturing in 2018 on Jul16, 2013 is A+.

c) The closing price on morgan Stanley 5.950% bonds on Jul15, 2013 is 112.083% - 0.373% = 111.710% which is on the face value of the bond.

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