Homework #4F (Bond Yield to Call
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School
University of Maryland, University College *
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Course
330 7980
Subject
Finance
Date
Nov 24, 2024
Type
docx
Pages
2
Uploaded by Dogmom87
Question
1
(1
point)
Saved
What
is
the
yield
to
call
of
a
30-year
to
maturity
bond
that
pays
a
coupon
rate
of
11.98
percent
per
year,
has
a
$1,000
par
value,
and
is
currently
priced
at
$918?
The
bond
can
be
called
back
in
7
years
at
a
call
price
$1,089.
Assume
annual
coupon
payments.
Round
the
answer
to
two
decimal
places
in
percentage
form.
(Write
the
percentage
sign
in
the
"units"
box)
You
should
use
Excel
or
financial
calculator.
Your
Answer:
ECR—
Answer
units
Question
2
(1
point)
Saved
Bright
Sun,
Inc.
sold
an
issue
of
30-year
$1,000
par
value
bonds
to
the public.
The
bonds
had
a
14.98
percent
coupon
rate
and
paid
interest
annually.
It
is
now
7
years
later.
The
current
market
rate
of
interest
on the
Bright
Sun
bonds
is
10.96
percent.
What
is
the
current
market
price
(intrinsic
value)
of
the
bonds?
Round
the
answer
to
two
decimal
places.
Your
Answer:
1333.30
Answer
Question
3
(1
point)
Saved
16
years
ago,
Delicious
Mills,
Inc.
issued
30-year
to
maturity
bonds
that
had
a
7.41
percent
annual
coupon
rate,
paid
semiannually.
The
bonds
had
a
$1,000
face
value.
Since
then,
interest
rates
in
general
have
changed
and
the
yield
to
maturity
on
the
Delicious
Mills
bonds
is
now
8.74
percent.
Given
this
information,
what
is
the
price
today
for
a
Delicious
Mills
bond?
Round
the
answer
to
two
decimal
places.
Your
Answer:
893.80
Answer
Question
4
(1
point)
Saved
Dan
is
considering
the
purchase
of
Super
Technology,
Inc.
bonds
that
were
issued
8
years
ago.
When
the
bonds
were
originally
sold
they
had
a
22-year
maturity
and
a
12.84
percent
coupon
interest
rate,
paid
annually.
The
bond
is
currently
selling
for
$877.
Par
value
of
the
bond
is
$1,000.
What
is
the
yield
to
maturity
on
the
bonds
if
you
purchased
the
bond
today?
Round
the
answers
to
two
decimal
places
in
percentage
form.
(WWrite
the
percentage
sign
in
the
"units"
box)
You
should
use
Excel
or
financial
calculator.
Your
Answer:
Answer
units.
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