Question

Bond P is a premium bond with a coupon of 7.2 percent , a YTM of 5.95 percent, and 15 years to maturity. Bond D is a discount bond with a coupon of 7.2 percent, a YTM of 8.95 percent, and also 15 years to maturity. If interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now? In 5 years? In 10 years? In 14 years? In 15 years? (Input all amounts as positive values. Do not round intermediate calculations. Round your answers to 2 decimal places.)

Answer 1

PMT = fv x coupon rate/2 FV = face value rate = YTM/2 NPER (number of payments) 30 30 price = pv -PV(rate,nper,pmt,fv) $1,122.90 $857.05 | pirce today Bond P Bond D 36 36 1000 1000 2.98% 4.48% 28 pirce in one year Bond P Bond D 1000 1000 2.98% 4.48% $1,117.63 $861.86 28 20 1000 pirce in 5 year Bond P Bond D 2.98% 4.48% $1,093.20 $885.93 20 1000 pirce in 10 year Bond P Bond D 1000 1000 2.98% 4.48% $1,053.38 $930.68 7 2__ 1000 pirce in 14 years Bond P Bond D 2.98% 4.48% $1,011.96 $983.61 - 2 1000 1000 pirce in 15 years Bond P Bond D LO 36 36 2.98% 2.98% 4.48% $1,000.00 $1,000.00 1000