### Educational Material on Government Bonds#### Table 1: Yield to Maturity (YTM) for Government BondsThis 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 RatesThis 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 BondsThis 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.

Name: ### Educational Material on Government Bonds#### Table 1: Yield to Ma
Uploaded: 2024-03-05T11:42:36.000Z
Channel: Bartleby
Description: ### Educational Material on Government Bonds#### Table 1: Yield to Maturity (YTM) for Government BondsThis table displays the YTM for four different government bonds, based on their price, semi-annual coupon rate, face value, and maturity.| |

Given price of bond 99.83 Semi annual coupon rate is 2.25%

Business

Finance

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

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

Problem 1PS

See similar textbooks

Similar questions

Years to maturity 0.5 1.0 1.5 2.0 Yield 4.6% 5.0% 5.4% 5.8% Assuming that the yields on the 0.5-year and 1-year bonds are their respective spot rates, compute the 1.5-year and spot rate. Don't write answer is decimals (i.e. if result is .04 write answer as 4)
Answer question a and b please and thank you
Bond A B Liquidity High High Low D 8 Low Based on the table above, what is the default risk premium? O 0.5% O 1% 01.5% с Maturity 2 8 2 Default Risk Low High High High YTM 3,50% 5.00% 5.50% 18.00%
C20 fx A В C On January 1, Ruiz Company issued bonds as follows: 3 4 Face Amount: $500,000 5 Number of Years: 15 Stated Interest Rate: 7% 7 Interest payments per year 2 8. 9. Required: 10 1) Calculate the bond selling price given the two market interest rates below. 11 Use formulas that reference data from this worksheet and from the appropriate future or present value tables (found by clicking the tabs at the bottor 12 this worksheet). 13 Note: Rounding is not required. 14 15 a) Annual Market Rate 9% 16 Semiannual Interest Payment: $17,500 17 PV of Face Amount: 18 PV of Interest Payments: 19 Bond Selling Price: 0.00 20 21 b) Annual Market Rate 6.00% 22 Semiannual Interest Payment: $17,500 23 PV of Face Amount: 24 PV of Interest Payments: 25 Bond Selling Price: %3D 26 A Future Value of Annuity of $1 A Present Value of Annuity of $1 A Graded Worksheet II
F What must be the price of a $2,000 bond with a 5.9% coupon rate, annual coupons, and 25 years to maturity if YTM is 10.2% APR? A. $984.98 B. $1,231.23 OC. $1,723.72 D. $1,477 47 CODE
B D E F 1 2 Consider the following newly issued bonds-a coupon-bearing bond, a zero-coupon bond, and a perpetuity. 3 4 Inputs Kimball Industries Coupon Bond 5 Settlement Date 1/1/2020 Blake & Associates Zero-Coupon Bond 1/1/2020 PJ Financial Perpetual Bond 1/1/2020 6 Maturity Date 1/1/2040 1/1/2040 Indefinite/Infinite 7 Coupon Rate 2.44% 0.00% 2.06% 8 Face Value 9 Coupons per Year 100 1 100 100 1 2 10 11 Market Data 12 Yield 3.93% 13 14 Required: 15 Note: Use cells A2 to B12 from the given information to complete this question. 16 17 Using any necessary data above, calculate the Macaulay Duration of each bond. Then, use the Macaulay Duration to solve for the Modified Duration. 18 19 Kimball Industries Coupon Bond Blake & Associates Zero-Coupon Bond PJ Financial Perpetual Bond 20 Price 21 Macaulay Duration 22 Modified Duration 23 24
20 21 b. Calculate the price of each of the three bonds. 22 23 Basic Input Data 24 Years to maturity 25 Periods per year 26 Periods to maturity 27 Coupon rate 28 Par value 29 Periodic payment 30 Yield to maturity 31 32 VB0 33 34 35 = 49 Periodic payment 50 Yield to maturity 51 52 VBI 53 54 Expected CG Yield = 55 = 56 Expected Total Return= 57 58 59 Bond A 05problem 07problem Ready Accessibility: Investigate 12 1 12 7% $1,000 $70 9% esc $111.98 c. Calculate the current yield for each of the three bonds. (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1.) 36 Current yield = Annual coupon / Price 37 Bond A 38 Current yield = 39 40 d. If the yield to maturity for each bond remains at 9%, what will be the price of each bond 1 year from now? 41 What is the expected capital gains yield for each bond? What is the expected total return for each bond? 42 43 Basic Input Data 44 Years to maturity 45 Periods per year 46 Periods to maturity 47 Coupon rate 48 Par…
20 21 b. Calculate the price of each of the three bonds. 22 23 Basic Input Data 24 Years to maturity 25 Periods per year 26 Periods to maturity 27 Coupon rate 28 Par value 29 Periodic payment 30 Yield to maturity 31 32 VB0 33 34 35 = 49 Periodic payment 50 Yield to maturity 51 52 VBI 53 54 Expected CG Yield = 55 = 56 Expected Total Return= 57 58 59 Bond A 05problem 07problem Ready Accessibility: Investigate 12 1 12 7% $1,000 $70 9% esc $111.98 c. Calculate the current yield for each of the three bonds. (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1.) 36 Current yield = Annual coupon / Price 37 Bond A 38 Current yield = 39 40 d. If the yield to maturity for each bond remains at 9%, what will be the price of each bond 1 year from now? 41 What is the expected capital gains yield for each bond? What is the expected total return for each bond? 42 43 Basic Input Data 44 Years to maturity 45 Periods per year 46 Periods to maturity 47 Coupon rate 48 Par…
INV3 1c If the liquidity preference theory is correct and you believe that the liquidity premium is 1 percent, what is the market expectation of the price that bond #4 will sell for next year? Bond # 1 2 3 4 1 - year strip bond 2- year strip bond 2-year 6% coupon bond 2-year 7% coupon bond Purchase Price for the bond) 950 907.03 1,009.23 1,027.69 Year 1 cash flow 1000 0 60 70 Year 2 cash flow 0 1000 1060 1070 Yield to Maturity 5% 5% 5.50% 5.50%
B 9 Company D 10 Redeemable bonds 1 2 3 -4 16 17 18 49 50 51 52 Number of bonds issued Market value per bond Coupon rate Number of years until redemption Redemption value Part (b) 17,500 £105.00 7.0% 3 at par Please complete the following for the redeemable bonds Number of years Interest per bond (£) Market value per bond (£) Redemption value per bond (£) Tax rate Kd MVd (£) 3 7.00 -105.00 25.00%
Question 10 Estimate the yield-to-maturity of a bond with the parameters given below. Face value Coupon rate $ 1,000.00 11% Cost of capital 11% Years to maturity 5 Timeline 1 2 3 4 Probability of payment 1 1 0.5 0.5 Promissed payments Expected payments PV (payments) Price of bond Yield-to-maturity 5 0.5
eBook X Open spreadsheet Show Me How Present value of bonds payable; discount Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder issued $20,000,000 of four-year, 8% bonds, with interest payable semiannually, at a market (effective) interest rate of 11%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. $ Office 365 Determine the present value of the bonds payable. Round your answer to the nearest dollar.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS