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 value Bond A 11 1 11 7% $1,000 $70 9% Bond B ! 1 12 1 12 $1,000 $90 9% Bond B 9% Bond B 58 11 1 11 9% $1,000 $90 9% Bond C 12 1 12 11% $1,000 $110 9% F1 Bond C Bond C 11 1 11 11% $1,000 $110 9% 2 F2 W #3 JAN 4 80 F3 F 4 F4 R % от оро 5 F
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 value Bond A 11 1 11 7% $1,000 $70 9% Bond B ! 1 12 1 12 $1,000 $90 9% Bond B 9% Bond B 58 11 1 11 9% $1,000 $90 9% Bond C 12 1 12 11% $1,000 $110 9% F1 Bond C Bond C 11 1 11 11% $1,000 $110 9% 2 F2 W #3 JAN 4 80 F3 F 4 F4 R % от оро 5 F
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
Related questions
Question
Transcribed Image Text: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 value
Bond A
11
1
11
7%
$1,000
$70
9%
Bond B
!
1
12
1
12
$1,000
$90
9%
Bond B
9%
Bond B
58
11
1
11
9%
$1,000
$90
9%
Bond C
12
1
12
11%
$1,000
$110
9%
F1
Bond C
Bond C
11
1
11
11%
$1,000
$110
9%
2
F2
W
#3
JAN
4
80
F3
F
4
F4
R
%
от оро
5
F
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