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Problem 1 (Required, 25 marks) We consider a 10-year straight term issued currently. It has face...
Problem 1 (Required, 25 marks) You are given two 5-year callable bond (Bond A and Bond...
Problem 1 (Required, 25 marks) You are given two 5-year callable bond (Bond A and Bond B) .Bond A: It has face value $600 and pays coupon semi-annually at an annual coupon rate 7.2%. Starting from 4th year, the bond can be redeemed on any coupon payment date (including maturity date) at price $660. Bond B: It has face value $650 and pays coupon quarterly at an annual coupon rate 7.2%. Starting from 4th year, the bond can be redeemed...
Problem 3 (Required, 25 marks) We consider a 5-year straight term bond issued today. The bond...
Problem 3 (Required, 25 marks) We consider a 5-year straight term bond issued today. The bond pays coupon quarterly and the current annual effective yield rate is i= 7.1859%. You are also given that The current bond price is 2167.529. The book value at the end of 15th month is 2130.929 Assuming that the yield rate remains unchanged over these 5 years, (a) find the book value of the bond at the end of 22nd month (b) Find the market...
Problem 3 (Required, 25 marks) We consider a 5-year straight term bond issued today. The bond...
Problem 3 (Required, 25 marks) We consider a 5-year straight term bond issued today. The bond pays coupon quarterly and the current annual effective yield rate is i = 7.1859%. You are also given that • The current bond price is 2167.529. • The book value at the end of 15th month is 2130.929. Assuming that the yield rate remains unchanged over these 5 years, (a) find the book value of the bond at the end of 22nd month. (b)...
18. Bill buys a 10-year 1000 par value 6% bond with semi-annual coupons. The price assumes...
18. Bill buys a 10-year 1000 par value 6% bond with semi-annual coupons. The price assumes a nominal yield of 6%, compounded semi-annually. As Bill receives each coupon payment, he immediately puts the money into an account earning interest at an annual effective rate of i. At the end of 10 years, immediately after Bill receives the final coupon payment and the redemption value of the bond, Bill has earned an annual effective yield of 7% on his investment in...
1) Consider a 10-year bond trading at $1150 today. The bond has a face value of...
1) Consider a 10-year bond trading at $1150 today. The bond has a face value of $1,000, and has a coupon rate of 8%. Coupons are paid semiannually, and the next coupon payment is exactly 6 months from now. What is the bond's yield to maturity? 2)A coupon-paying bond is trading below par. How does the bond's YTM compare to its coupon rate? a. Need more info b. YTM = Coupon Rate c. YTM > Coupon Rate d. YTM <...
Problem #2: A bond has a face value (and redemption value) of $504,000, and pays coupons...
Problem #2: A bond has a face value (and redemption value) of $504,000, and pays coupons annually. The effective annual yield is 3 times the coupon rate. The present value of the redemption amount is 3 times the present value of the coupon stream. What is the price of the bond?
A3-18 You are currently holding a corporate bond. It has a remaining life of exactly 25...
A3-18 You are currently holding a corporate bond. It has a remaining life of exactly 25 years till maturity. It has a coupon rate of 4.5% (nominal rate compounded semi-annually) and a face value of $1,000. Currently the market is demanding a nominal rate of 6% compounded semi-annually on bonds with similar risk, and maturity date. A) If your are thinking of selling the bond today, what is the current value of the bond? B) If you paid $900 for...
A3-18 You are currently holding a corporate bond. It has a remaining life of exactly 25...
A3-18 You are currently holding a corporate bond. It has a remaining life of exactly 25 years till maturity. It has a coupon rate of 4.5% (nominal rate compounded semi-annually) and a face value of $1,000. Currently the market is demanding a nominal rate of 6% compounded semi-annually on bonds with similar risk, and maturity date. A) If your are thinking of sélling the bond today, what is the currert value of the bond? B) If you paid $900 for...
Problem 1: You are considering investing in a 10-year bond issued by NewEnergy Inc. This bond has $1000 face value,...
Problem 1: You are considering investing in a 10-year bond issued by NewEnergy Inc. This bond has $1000 face value, 4% coupon rate. The bond pays coupons semi-annually and is currently selling at $920. The bond can be called at a $1,040 in 3 years. 1.d. (6 points) If the bond is called back by the firm at price of $1,040 in three years, what is the yield to call? N= FV= PMT= PV= PMT Type= Periodic Discount Rate= Yield...
A3-18) You are currently holding a corporate bond. It has a remaining life of exactly 25...
A3-18) You are currently holding a corporate bond. It has a remaining life of exactly 25 years till maturity. It has a coupon rate of 4.5% (nominal rate compounded semi annually and a face value of $1000. Currently the market is demanding a nominal rate of 6% compounded semi-annually on bonds with similar risk and maturity date. A) If you are thinking of selling the bond today, what is the current value of the bond? B) If you paid $900...
Problem 1 (Required, 25 marks) You are given two 5-year callable bond (Bond A and Bond B) .Bond A: It has face value $600 and pays coupon semi-annually at an annual coupon rate 7.2%. Starting from 4th year, the bond can be redeemed on any coupon payment date (including maturity date) at price $660. Bond B: It has face value $650 and pays coupon quarterly at an annual coupon rate 7.2%. Starting from 4th year, the bond can be redeemed...
Problem 3 (Required, 25 marks) We consider a 5-year straight term bond issued today. The bond pays coupon quarterly and the current annual effective yield rate is i= 7.1859%. You are also given that The current bond price is 2167.529. The book value at the end of 15th month is 2130.929 Assuming that the yield rate remains unchanged over these 5 years, (a) find the book value of the bond at the end of 22nd month (b) Find the market...
Problem 3 (Required, 25 marks) We consider a 5-year straight term bond issued today. The bond pays coupon quarterly and the current annual effective yield rate is i = 7.1859%. You are also given that • The current bond price is 2167.529. • The book value at the end of 15th month is 2130.929. Assuming that the yield rate remains unchanged over these 5 years, (a) find the book value of the bond at the end of 22nd month. (b)...
18. Bill buys a 10-year 1000 par value 6% bond with semi-annual coupons. The price assumes a nominal yield of 6%, compounded semi-annually. As Bill receives each coupon payment, he immediately puts the money into an account earning interest at an annual effective rate of i. At the end of 10 years, immediately after Bill receives the final coupon payment and the redemption value of the bond, Bill has earned an annual effective yield of 7% on his investment in...
Problem #2: A bond has a face value (and redemption value) of $504,000, and pays coupons annually. The effective annual yield is 3 times the coupon rate. The present value of the redemption amount is 3 times the present value of the coupon stream. What is the price of the bond?
A3-18 You are currently holding a corporate bond. It has a remaining life of exactly 25 years till maturity. It has a coupon rate of 4.5% (nominal rate compounded semi-annually) and a face value of $1,000. Currently the market is demanding a nominal rate of 6% compounded semi-annually on bonds with similar risk, and maturity date. A) If your are thinking of selling the bond today, what is the current value of the bond? B) If you paid $900 for...
A3-18 You are currently holding a corporate bond. It has a remaining life of exactly 25 years till maturity. It has a coupon rate of 4.5% (nominal rate compounded semi-annually) and a face value of $1,000. Currently the market is demanding a nominal rate of 6% compounded semi-annually on bonds with similar risk, and maturity date. A) If your are thinking of sélling the bond today, what is the currert value of the bond? B) If you paid $900 for...
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