13. Bond listings and yield spreads The following bond list is from the business section of a financial newspaper on January 1, 2016. Assume that each bond shown matures on January 1 in 5, 10, or 30 years. Each bond shown pays a semiannual coupon-the coupon rate is in the column labelled Coupon. The Last Price and Last Yield columns indicate each bond's price and YTM at the end of trading. EST Spread indicates the bond's spread above the relevant U.S. Treasury benchmark, expressed as a percentage. UST indicates which U.S. Treasury security maturity is the relevant benchmark for each bond. EST Volume shows the number of bonds traded during the day. Notice also that prices are stated relative to a par value of $100. Assume all bonds have the same default premium. Fill in the value of The Blue Co.'s bonds. Company Wernham Inc. Initrode Inc. Housing Co. Sto Co. The Blue Co. Coupon Maturity 8.25% 01-01-2026 5.80% 01-01-2021 01-01-2026 8.98% 9.63% 4.13% Which bond is trading at a premium? O Housing Co. O Sto Co. If you were to calculate the yield on a security with a 10-year U.S. Treasury security, the yield will be equal to O The Blue Co. 01-01-2046 01-01-2021 O Initrode Inc. Last Price Last Yield $97.87 8.57% $99.22 5.98% 8.37% $104.07 $88.14 10.98% 6.26% EST Spread UST (Years) EST Volume (1000s) 2.37 10 0.58 5 2.17 10 4.03 30 0.86 5 59,725 52,930 46,932 45,120 43,960
13. Bond listings and yield spreads The following bond list is from the business section of a financial newspaper on January 1, 2016. Assume that each bond shown matures on January 1 in 5, 10, or 30 years. Each bond shown pays a semiannual coupon-the coupon rate is in the column labelled Coupon. The Last Price and Last Yield columns indicate each bond's price and YTM at the end of trading. EST Spread indicates the bond's spread above the relevant U.S. Treasury benchmark, expressed as a percentage. UST indicates which U.S. Treasury security maturity is the relevant benchmark for each bond. EST Volume shows the number of bonds traded during the day. Notice also that prices are stated relative to a par value of $100. Assume all bonds have the same default premium. Fill in the value of The Blue Co.'s bonds. Company Wernham Inc. Initrode Inc. Housing Co. Sto Co. The Blue Co. Coupon Maturity 8.25% 01-01-2026 5.80% 01-01-2021 01-01-2026 8.98% 9.63% 4.13% Which bond is trading at a premium? O Housing Co. O Sto Co. If you were to calculate the yield on a security with a 10-year U.S. Treasury security, the yield will be equal to O The Blue Co. 01-01-2046 01-01-2021 O Initrode Inc. Last Price Last Yield $97.87 8.57% $99.22 5.98% 8.37% $104.07 $88.14 10.98% 6.26% EST Spread UST (Years) EST Volume (1000s) 2.37 10 0.58 5 2.17 10 4.03 30 0.86 5 59,725 52,930 46,932 45,120 43,960
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
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Transcribed Image Text:13. Bond listings and yield spreads
The following bond list is from the business section of a financial newspaper on January 1, 2016. Assume that each bond shown matures on January 1
in 5, 10, or 30 years. Each bond shown pays a semiannual coupon-the coupon rate is in the column labelled Coupon.
The Last Price and Last Yield columns indicate each bond's price and YTM at the end of trading. EST Spread indicates the bond's spread above the
relevant U.S. Treasury benchmark, expressed as a percentage. UST indicates which U.S. Treasury security maturity is the relevant benchmark for each
bond. EST Volume shows the number of bonds traded during the day. Notice also that prices are stated relative to a par value of $100. Assume all
bonds have the same default premium.
Fill in the value of The Blue Co.'s bonds.
Company
Wernham Inc.
Initrode Inc.
Housing Co.
Sto Co.
The Blue Co.
Coupon
8.25%
Maturity
01-01-2026
5.80% 01-01-2021
8.98% 01-01-2026
01-01-2046
9.63%
4.13%
01-01-2021
Which bond is trading at a premium?
O Housing Co.
The Blue Co.
Sto Co.
If you were to calculate the yield on a security with a 10-year U.S. Treasury security, the yield will be equal to
Last Price
O Initrode Inc.
$97.87
$99.22
$104.07
$88.14
Last Yield
8.57%
5.98%
8.37%
10.98%
6.26%
EST Spread UST (Years) EST Volume (1000s)
2.37
10
59,725
0.58
5
52,930
2.17
10
46,932
4.03
30
45,120
0.86
5
43,960
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