Question

P6-18 (similar to) Question Help 0 Missing information on a bond. Your broker faxed to you the following information about two monthly coupon bonds that you are considering as a potential investment. Unfortunately, your fax machine is blurring some of the items, and all you can read from the fax on the two different bonds is the following: 3. Fill in the missing data from the information that the broker sent. What is the price of the IBM coupon bond? $ (Round to the nearest cent.) i Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) AOL Coupon Bond $5,000 Features Face value (Par) Coupon rate Yield to maturity Years to maturity Price IBM Coupon Bond $1,000 6.5% 9.5% 20 ? 10.5% 30 $2,494.73 Print Done

Answer 1

As it is not specified here I am going to calculate the first sum:-

P6-18

523 524 525 526 527 528 529 530 531 Features Face value coupon rate coupon amount Yield to Maturity Years to Maturity Price No. of compounding IBM COUPON BOND AOL BOND 1000 5000 6.50% 5.22% 65 260.9766021 9.50% 10.50% 30 $731.80 2594.73 12 20 12

Price (IBM) =-PV(P528/P531,P529*P531,P527/P531,P525)

Coupon Payment(AOL)(YEARLY)=PMT(Q528/Q531,Q529*Q531,-Q530,Q525)*12

Coupon Rate (AOL)=Q527/Q525

Q Juu 524 Note Bond 525 526 527 Features Face value coupon rate coupon amount Yield to Maturity Years to Maturity Price 100 4.50% 4.5 4.865% 10 $97.14 100 9.75% 9.75 7.983% 528 20 529 530 117.51 531 No. of compounding

Formulas used:-

Yield to maturity=RATE(P529*P531,P527/P531,-P530,P525)*2

(Same draged in another cell)

I hope my efforts will be fruitful to you....?