Question

A 20-year maturity bond with par value of $1,000 makes semiannual coupon payments at a coupon rate of 9%. Find the bond equivalent and effective annual yield to maturity of the bond for the following bond prices. (Round your answers to 2 decimal places.) Bond Prices Bond Equivalent Annual Yield to Maturity Effective Annual Yield to Maturity a. b. c. $ $ $ 940 1,000 1,040 %

Answer 1

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2 * : ENG 23:50 03-03-2020 24 DF98 _ DC DDDE DE DG DH DI D DK DL DM DNDODPDQ DR. BA PLUS II calculator strokes first of all 105 set 106 C/Y = P/Y = 108 (a) then 109 110 111 112 N = PV = PMT= FV = 1/Y = 40 [20 x 2] 940.00 -45.00 (1000 x 9%/2] -1000 9.68 113 CPT 114 115 BEY 9.68% 116 117 EAY 9.92% (EAY = (1+(BEY/2)^2 - 1] 118 NPV BOND Sheet4 PV FV choice EAR nper WACC Sheet1 Sheet2 Sheet3 Sheets HERO WACC AFN manua ... :

w 2 * : ENG 23:50 03-03-2020 24 DJ119 . DC X DD fix DE DF DG DH DI DJ DK DL DM DN DO DP D Q DR . 119 120 (b) 121 N = 122 123 PV = PMT= FV = 1/Y = 40 [20 x 2] 1000.00 -45.00 (1000 x 9%/2] -1000 9.00 125 CPT BEY 9.00% EAY 9.20% (EAY = (1+(BEY/2))^2 - 1] 130 131 132 (c) 133 N = 135 PV = PMT= FV = 1/Y = 40 [20 x 2] 1040.00 -45.00 (1000 x 9%/2] -1000 8.58 CPT BEY 8.58% EAY 8.76% (EAY = (1+(BEY/2))^2 - 1] 142 NPV BOND Sheet4 PV FV choice EAR nper WACC Sheet1 Sheet2 Sheet3 Sheets HERO WACC AFN manua ... :