a. Consider a 5 1/8 bond, maturing at 12/31/02 (coupon pmt date is 6/30 and 12/31)...
a. Consider a 5 1/8 bond, maturing at 12/31/02 (coupon pmt date is 6/30 and 12/31) trading at 101:11 for settlement 8/12/02. Calculate accrued interest and invoice price. (M = 100,000)
b. Consider now a 5 1/2 bond, maturing 3/31/03, trading at 102:15 for settlement, 8/12/02. Calculate accrued interest and invoice price (M=100,000)
Homework Answers
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a. Consider a 5 1/8 bond, maturing at 12/31/02 (coupon pmt date
is 6/30 and 12/31)...
Consider a 3 5/8 TIPS maturing 7/15/02 (settlement on 7/15/00). Assume the TIPS is trading at...
Consider a 3 5/8 TIPS maturing 7/15/02 (settlement on 7/15/00). Assume the TIPS is trading at par. What is the real yield to maturity on the TIPS? Also, what is the price of the TIPS, if the CPI has increased 12% from the time the TIPS has been issued (Assume an initial par value of M=100,000). Assume that the semi-annual inflation rate for the next two years equals 1.5%. Calculate the semi-annual coupon payments on the TIPS. Also calculate the...
When you buy a bond, the date of purchase (the settlement date) is often between two coupon payme...
When you buy a bond, the date of purchase (the settlement date) is often between two coupon payment dates. In this situation, the price you pay (the invoice price) is the sum of the flat price and the accrued interest. Invoice price = Flat price + Accrued Interest For a semi-annual payment coupon bond, the accrued interest In this exercise, you compute the invoice price of a $1000 par value, 5% semi-annual payment coupon bond maturing on 30th June 2025...
The spreadsheet shows you how to calculate invoice price for 6-year maturity bond with a coupon r...
The spreadsheet shows you how to calculate invoice price for 6-year maturity bond with a coupon rate of 2.25% (paid semiannually). The market interest rate given is 7.9%. Now, please modify the spreadsheet and calculate invoice price of bond with 6.25% coupon (paid semiannually), settlement date July 31,2012, maturity date May 15, 2030, YTM 7.9%. 2.25% coupon bond, maturing July 31, 2018 Formula in column B Settlement date 7/31/2012 =DATE(2012,7,31) Maturity date 7/31/2018 =DATE(2018,7,31) Annual coupon rate 0.0225 Yield to...
Consider a 3 TIPS maturing 7/15/02 (settlement on 7/15/00). Assume the TIPS is trading at par....
Consider a 3 TIPS maturing 7/15/02 (settlement on 7/15/00). Assume the TIPS is trading at par. What is the real yield to maturity on the TIPS? Also, what is the price of the TIPS, if the CPI has increased 12% from the time the TIPS has been issued (Assume an initial par value of M=100,000). Assume that the semi-annual inflation rate for the next two years equals 1.5%. Calculate the semi-annual coupon payments on the TIPS. Also calculate the par...
A fixed coupon bond has a coupon rate of 4% paid semi-annually with a maturity date...
A fixed coupon bond has a coupon rate of 4% paid semi-annually with a maturity date of 8/15/20. The bond uses a 30/360 day counting convention and is trading at a yield today (12/10/19) of 3%. Calculate the following for today: The Dirty Price of the Bond The Accrued Interest of the Bond Answer this :The Clean Price of the Bond
A fixed coupon bond has a coupon rate of 4% paid semi-annually with a maturity date...
A fixed coupon bond has a coupon rate of 4% paid semi-annually with a maturity date of 8/15/20. The bond uses a 30/360 day counting convention and is trading at a yield today (12/10/19) of 3%. Calculate the following for today: The Dirty Price of the Bond Answer this: The Accrued Interest of the Bond
Consider a bond with the following characteristics: Semi-annual payments, coupon rate of 8%, $1,000 par value....
Consider a bond with the following characteristics: Semi-annual payments, coupon rate of 8%, $1,000 par value. 6 years to maturity. Discount rate (Interest rate) is r= 5%. If 95 days have passed since the last coupon payment, what is the accrued interest? Consider 182 days between payments. a) Calculate the flat price of the bond. b) Calculate the accrued interest. c) Calculate the invoice price.
A 5% semiannual coupon $100 bond maturing in 15 years is callable on any coupon date...
A 5% semiannual coupon $100 bond maturing in 15 years is callable on any coupon date after the 10th. If called on the 11th through 20th coupon date, the redemption value would be $110. If callable on the 21st through 30th coupon date, redemption would be at par. Find the price that would ensure an investor a minimum yield of 3% per annum compounded semiannually
Consider a T-bill maturing 11/21/02. Bloomberg quotes a BDR for the bill of 1.59% for the...
Consider a T-bill maturing 11/21/02. Bloomberg quotes a BDR for the bill of 1.59% for the settlement on 8/13/02. Calculate the price and BEY for the bill (M = 10,000)
XYZ has an outstanding bond. It's a 6% semiannual coupon bond maturing in 5 years with...
XYZ has an outstanding bond. It's a 6% semiannual coupon bond maturing in 5 years with a par value of $100 and is trading at $90. Income tax rate is 25%. Calculate the after-tax cost of debt for XYZ. Group of answer choices 6.77% 6.38% 4.64% 4.06%
Consider a bond with the following characteristics: Semi-annual payments, coupon rate of 8%, $1,000 par value. 6 years to maturity. Discount rate (Interest rate) is r= 5%. If 95 days have passed since the last coupon payment, what is the accrued interest? Consider 182 days between payments. a) Calculate the flat price of the bond. b) Calculate the accrued interest. c) Calculate the invoice price.
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