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1 2 3 Price 4 Semi-ann 5 Face valu 6 Maturity 7 YTM 8 9 10 11 12 13 14 1. Find the Yield to Maturity (YTM) for the following government bonds 15 99.83 2.25% 100 3 2.31% YTM Semi-ann Face valu Price Semi-ann Face valu Maturity YTM 2.64% 2.38% 100 98.45 2.50% YTM Semi-ann Face valu 100 17 2.61% Price Semi-ann Face valu Maturity YTM 2.17% 2% 100 2. Based on the following YTM for the various maturities, what price are these government bonds trading at? 99.25 2.75% YTM Semi-ann Face valu 100 10 2.84% Price Semi-ann Face valu Maturity YTM 3% 5.50% 100 97.5 3 10 3 3.129

1 2 3 Price 4 Semi-ann 5 Face valu 6 Maturity 7 YTM 8 9 10 11 12 13 14 1. Find the Yield to Maturity (YTM) for the following government bonds 15 99.83 2.25% 100 3 2.31% YTM Semi-ann Face valu Price Semi-ann Face valu Maturity YTM 2.64% 2.38% 100 98.45 2.50% YTM Semi-ann Face valu 100 17 2.61% Price Semi-ann Face valu Maturity YTM 2.17% 2% 100 2. Based on the following YTM for the various maturities, what price are these government bonds trading at? 99.25 2.75% YTM Semi-ann Face valu 100 10 2.84% Price Semi-ann Face valu Maturity YTM 3% 5.50% 100 97.5 3 10 3 3.129

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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### Educational Material on Government Bonds #### Table 1: Yield to Maturity (YTM) for Government Bonds This table displays the YTM for four different government bonds, based on their price, semi-annual coupon rate, face value, and maturity. | | Bond 1 | Bond 2 | Bond 3 | Bond 4 | |--------|---------|---------|---------|---------| | Price | 99.83 | 98.45 | 99.25 | 97.59 | | Semi-Ann. Coupon Rate | 2.25% | 2.50% | 2.75% | 3% | | Face Value | 100 | 100 | 100 | 100 | | Maturity (years) | 3 | 17 | 10 | 30 | | YTM | 2.31% | 2.61% | 2.84% | 3.12% | #### Table 2: Calculated Prices of Government Bonds Based on Maturity Rates This table calculates the price for bonds given different YTM rates and associated semi-annual coupon rates. | | Bond 1 | Bond 2 | Bond 3 | |--------|---------|---------|---------| | YTM | 2.64% | 2.17% | 3% | | Semi-Ann. Coupon Rate | 2.38% | 2% | 5.50% | | Face Value | 100 | 100 | 100 | | Maturity (years) | 4 | 7 | 20 | | Price | $99.02 | $99.67 | $137.39 | #### Table 3: Semi-Annual Coupon Rate for Government Bonds This table shows the semi-annual coupon rate necessary for bonds to achieve specified YTM rates, based on their maturity. | | Bond 1 | Bond 2 | Bond 3 | Bond 4 | |--------|---------|---------|---------|---------| | YTM | 4% | 4.30% | 5% | 6% | | Semi-Ann.
Transcribed Image Text:### Educational Material on Government Bonds #### Table 1: Yield to Maturity (YTM) for Government Bonds This table displays the YTM for four different government bonds, based on their price, semi-annual coupon rate, face value, and maturity. | | Bond 1 | Bond 2 | Bond 3 | Bond 4 | |--------|---------|---------|---------|---------| | Price | 99.83 | 98.45 | 99.25 | 97.59 | | Semi-Ann. Coupon Rate | 2.25% | 2.50% | 2.75% | 3% | | Face Value | 100 | 100 | 100 | 100 | | Maturity (years) | 3 | 17 | 10 | 30 | | YTM | 2.31% | 2.61% | 2.84% | 3.12% | #### Table 2: Calculated Prices of Government Bonds Based on Maturity Rates This table calculates the price for bonds given different YTM rates and associated semi-annual coupon rates. | | Bond 1 | Bond 2 | Bond 3 | |--------|---------|---------|---------| | YTM | 2.64% | 2.17% | 3% | | Semi-Ann. Coupon Rate | 2.38% | 2% | 5.50% | | Face Value | 100 | 100 | 100 | | Maturity (years) | 4 | 7 | 20 | | Price | $99.02 | $99.67 | $137.39 | #### Table 3: Semi-Annual Coupon Rate for Government Bonds This table shows the semi-annual coupon rate necessary for bonds to achieve specified YTM rates, based on their maturity. | | Bond 1 | Bond 2 | Bond 3 | Bond 4 | |--------|---------|---------|---------|---------| | YTM | 4% | 4.30% | 5% | 6% | | Semi-Ann.
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