Assignment 5-4 Worksheet

Problem 5-6 Information about three securities appears next. Stock 1 Stock 2 Bond 1 Beginning-of-Year Price $ 43.80 $ 2.55 $ 1,150 End-of-Year Price $ 48.05 $ 2.75 $ 1,178 Interest/Dividend Paid $ 2.80 $ .00 $ 54.00 a. Assuming interest and dividends are paid annually, calculate the annual holding period return on each security. Note: Round your answers to 1 decimal place. Stock 1 Stock 2 Bond 1 Annual Holding Period Return % % %

Exercise 15-1 (Static) Debt and equity securities and short- and long-term investments LO C1 Complete the following descriptions by selecting the appropriate option. 1. Debt securities reflect a(n) 2. Equity securities reflect a(n) 3. Short-term investments are securities that (1) management intends to convert to cash within or the 4. Long-term investments in securities are defined as those securities that are convertible to cash or are relation such as with investments in notes and bonds. relation such as with investments in shares of stock. whichever is longer, and (2) are readily convertible to to be converted into cash in the short term.

Acme Chemical, Inc. is a major manufacturer of chemical products for the agricultural ndustry, including pesticides, herbicides and other compounds. Due to a number of law suits elated to toxic wastes, Acme Chemical has recently experienced a market re-evaluation of its common stock. The firm also has a bond issue outstanding with 10 years to maturity and an annual coupon rate of 5 percent, with interest paid semi annually. The required nominal market annual interest rate on this bond has now risen to 10 percent due to the high risk level associated vith this firm. The bonds have a par or face value of $1,000. 1. Label each of the variables that you would use to determine the value of this bond in the market today: N (time periods until maturity) PMT (periodic interest payment) I per (periodic market interest rate) EV (future value to be received when the bond matures) = 2. Based on the variables that you have identified in Question #1, what is the market value. today (the present…

Question content area top Part 1 Bond valuation—Semiannual interest   Calculate the value of each of the bonds shown in the following​ table, all of which pay interest semiannually.  ​(Click on the icon here    in order to copy the contents of the data table below into a​ spreadsheet.) Bond Par Value Coupon interest rate Years to maturity Required stated annual return A ​$1,000   9 ​% 8   9 ​% B 1,000   13   15   12   C 100   15   6   16   Question content area bottom Part 1 The value of bond A is $______ (Round to the nearest​ cent.)

Problem 1 Assume you are considering 6 coupon bonds whose investment characteristics are given in the table below: Bond Current Market Price Coupon, % Term to Maturity, years A 94.125 7.82 7 B 99.842 8.25 9 с 106.041 9.14 10 D 95.074 6.86 4 100.893 F 101.221 8.61 9.12 5 8 Using the NPV approach define potential investment strategy in terms of buying/selling these bonds. Compute these bonds' net present values, given the alternative rate of return 7.98%. Problem 2 Using Problem 1 data, calculate yield to maturity of all bonds. Which bonds are quoted at a premium and which bonds are quoted at a discount?

Question 4 Which of the following is the correct ranking for the bond price? Bond Coupon Rate A B C A>B>C B> C>A C> A > B 6% 6% 7% Maturity (years) 8 8 7 YTM 6.5% 7% 6.5%

Problem 2 - Reading bond tables Consider the following information from the Treasury bond table: Maturity Coupon Bid Asked 7/15/2021 2.1% 100.1600 100.2480 Asked Yield 1.3% a. What is the asked price of the bond that matures on 7/15/2021 and has a face value of $500? b. What is its coupon and current yield? c. What its the yield to maturity?

Q1

Questions 6 The performance (%) of one stock and one bond over the past four years is as follows: Return Return Return in 2018 Return in 2019 Return in 2020 Average standard in 2017 return deviation Stock Bond 20 -30 25 15 25.33 1 3 3.75 ? a) What is the average return of the stock? b) What is the standard deviation of the bond? c) What are the two lessons from the capital market history?

estion list Question 7 K Refer to the bond listing table below to determine the daily high of the KFT.GX bond? Click the icon to view the bond listing from the table below. The daily high of the bond is % (Type an integer or a decimal.) Bond Listing from Wall Street Journal Online 1 2 3 4 5 6 7 8 9 Issuer Name CITIGROUP Symbol CHRY Coupon Maturity Rating Moody's/S&P/ Fitch Low 8.500% GENERAL GEHMX 5.500% May 2019 Jan 2020 A3/A/A+ Aa2/AA+/- - High 119.268 116.615 117.733 0.448 105.307 102.374 103.097 -0.028 Last Change ELECTRIC CAPITAL KRAFT FOODS KFT.GX 5.375% BANK OF BAC ICB 7.625% AMERICA ANHEUSER- BUD ID 5.375% BUSCH COMCAST CORP CMCD.GC 5.150% Mar 2020 Baa1/BBB+/BBB+ GOLDMAN GS.IAR 5.375% Mar 2020 A1/A/A+ Feb 2020 Baa2/BBB-/BBB- Jun 2019 A2/A/A+ Jan 2020 Baa2/BBB+/- - 106.081 101.999 103.411 0.687 113.172 111.839 112.847 0.283 104.693 104.061 104.526 -0.466 104.832 100.923 101.225 0.441 -0.592 99.750 95.636 96.642 SACHS GP BANK OF BAC IOP 4.500% Apr 2019 A2/A/A+ 101.750 99.288…

Question 1 Which of the following is the correct ranking of the price risk. Bond Coupon Rate A 6% B 8% с 6% O A>B>C O C>B>A O A>C>B Maturity (years) 10 5 5

A Treasury bond quoted at 102:14 102:16 has a bid price of _______ and an ask price of _____. a. $102.14, $102.16 b. $1,021.40, $1,021.60 c. $1,020.14, $1,020.16 d. $1,024.37, $1,025.00 e. $1,214.00, $1,216.00

All computations must be done and shown manually Question 4 Complete the following table and draw a graph showing how bond price for each bond changes over time as they move towards their maturity dates. Describe the relationship between bond prices and time remaining for maturity. Please include graph as per above information Years remaining to maturity BOND A Coupon. rate = 8% p.a. Market interest rate = 6% p.a. BOND B Coupon rate = 6% p.a. Market interest rate = 6% p.a. BOND C Coupon rate = 4% p.a. Market interest rate = 6% p.a. 10       9       8       7       6       5       4       3       2       1       0

Ch 11 Bonds and LTL1. When will bonds sell at a premium and discount? 2. Calculate bond interest under SL method.3. Impact of amortization of bond premium/discount on interest expense.4. Give an example journal entry for amortization of bond premium/discount.5. What is the Gain/loss on redemption of bonds? How do you calculate?6. Understand method of calculating PV of future cash flows -specifically for a bond.7. Why are bonds a popular source of financing?8. Contract rate (market rate) is used for what calculation purpose?Ch 10 SE: Corporations1. What are Rights possessed by common stockholders?2. What are a journal entries for stock issuance, cash dividend, stock dividend?3. What is the calculation of dividends when cumulative preferred stock is outstanding?4. Journal entries for treasury stock, financial statement presentation. Gain/loss on reissue of treasury stock.5. Prior period adjustment - example of, accounting for?6. define, describe, why use Stock split 7. Stock dividend –…

Q4

MC Qu. 41-16 When investors purchase a security... When investors purchase a security, they are buying which of the following? Multiple Choice O Only bonds Only stock A piece of paper What the paper represents

Question 27 The face value of a bond is O a. The amount payable at the maturity date. O b. The amount used to calculate periodic interest payments. O c. The par value of the bond. O d. All of the above are correct. Moving to another question will save this response.

Investors who wish to receive periodic interest income at predetermined regularly stated intervals should purchase which of the following? Select one: a. Treasury stock b. Stock in excess of par c. Stock with a high EPS d. Bonds with a contract rate of interest

Q3

Preview ●●● E View Edit File V Go Tools 6. Problem 5-12 (Bond Yields and Rates of Return) Window Help Screen Shot 2023-03-06 at 8.44.56 PM H Problem Walk-Through a. What is the bond's yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % 2 b. What is the bond's current yield? Do not round intermediate calculations. Round your answer to two decimal places. % eBook Bond Yields and Rates of Return A 25-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 4 years at a call price of $1,100. The bond sells for $950. (Assume that the bond has just been issued.) d. What is the band's yield to call? Do not round intermediate calculations. Round your answer to two decimal places. % HARD c. What is the bond's capital gain or loss yield? Capital loss yield, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. % $ Save & Continue Continue without saving Q 0…

Exercise 4. Consider the following information about the U.S. Treasury Securities: Maturity (in years) 0,5 Coupon rate 0% Price Yield to Maturity $ 96,15 8,0% 1 0% $ 92,19 8,3% 1,5 2 2,5 8,5% $ 99,45 8,9% 9,0% $ 99,64 9,2% 11,0% $ 103,49 9,4% a) Calculate the theoretical 1.5-year spot rate based on the data outlined in the table. b) Calculate the theoretical 2-year spot rate based on the data outlined in the table. (10 points) (10 points)

Question 4?