AssignmentName: ………………………………………………………………………………… Hmk-6BExercise #1: Draw the time line for an 8-year 5% annual coupon bond with a face value

Assignment

Name: ………………………………………………………………………………… Hmk-6B

Exercise #1: Draw the time line for an 8-year 5% annual coupon bond with a face value of $1000.

|———————————————————————————————————————————–

Compute the price of the bond assuming the yield to maturity is:

A. ytm = 3% FV = PMT= i= n= Press PV P = $ ……[1]..…………

B. ytm = 7% FV = PMT= i= n= Press PV P = $ ……[2].……………

Exercise #2: Draw the time line for a 12-year 4% annual coupon bond with a face value of $1000.

|———————————————————————————————————————————–

Compute the current yield and the yield to maturity for the bond assuming the price is:

A. P = 109 FV = PMT= PV= n= Press i ytm = ……[3]…………% cy = ………[4]………%

B. P = 97 FV = PMT= PV= n= Press i ytm = ………[5]………% cy = ………[6]………%

Exercise #3: A 5-year 5% ann BB-rated corporate bond’s yield to maturity is 4%. Price = ………[7]…………

The bond gets upgraded to AA-. It’s yield is likely to be ……[8]…… than 4% and ……[9]……… than 5%,

lower/higher lower/higher

and the price is likely to ……………[10]……………… .

go up/go down

Exercise #4: Compute the coupon rate for a 3-year annual coupon bond assuming the price is 98 and

the yield is 6.1%. Hint: We are solving for PMT (coupon) and expressing it as percent of par.

= = = = Press Coupon= ………[11…………%

First Three Letters

000

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

Moral Imagination Most are familiar with Nestlé, one of the world’s largest food producers, whose marketing slogan is: “Good food, Good life.” On its

Moral Imagination Most are familiar with Nestlé, one of the world’s largest food producers, whose marketing slogan is: “Good food, Good life.” On its website, the corporation states that its three main ambitions are helping children live healthier lives, improving livelihoods in communities, and striving for zero environmental impact (Nestlé,