An analyst gathers the following information about two similarly rated 8% semiannual coupon payment bonds: Bond 1 Bond 2 Price 114.243 112.691 Years to maturity. 3 5 Yield to maturity. 3% 5% Q. Using matrix pricing, the price per 100 of par value of a 4-year semiannual coupon payment bond with similar credit quality and a 7.6% annual coupon is closest to: Confirm A. 113.07. B. 113.19. C. 113.47.

An analyst gathers the following information about two similarly rated 8% semiannual coupon payment bonds: Bond 1 Bond 2 Price 114.243 112.691 Years to maturity. 3 5 Yield to maturity. 3% 5% Q. Using matrix pricing, the price per 100 of par value of a 4-year semiannual coupon payment bond with similar credit quality and a 7.6% annual coupon is closest to: Confirm A. 113.07. B. 113.19. C. 113.47.

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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Using Excel, compute yield-to-maturity for the following bonds (report your Excel formulas and their inputs): Price = 90, Fixed Coupon Rate = 5%, Maturity = 5 years, Coupon Frequency = 1 b. Price = 90, Fixed Coupon Rate = 5%, Maturity = 5 years, Coupon Frequency = 2 Price = 90, Fixed Coupon Rate = 5%, Maturity = 5 years, Coupon Frequency = 4 а. %3D %3D С. %3D For each bond above, compute the Effective Annual Rate so that you can directly compare the bonds with different coupon payment frequencies. Based on these comparable effective annual rates, which bond has the highest expected return? How does the effective annual rates differ from yield-to-maturities computed in above? What is the explanation of these differences?|
A bond for the Chelle Corporation has the following characteristics: Maturity - 12 years Coupon - 12% Yield to maturity - 11.50% Macaulay duration - 6.73 years Convexity - 59.30 Noncallable Assume bond pays interest semiannually. Use only the data provided in the table above (in the problem statement) for your calculations. a. Calculate the approximate price change for this bond using only its duration, assuming its yield to maturity increased by 100 basis points. Do not round intermediate calculations. Round your answer to two decimal places. Use a minus sign to enter negative value, if any. Percentage change in price: % When you are dealing with large yield changes to calculate more precise bond price change -Select- v on price change. b. Calculate the approximate price change for this bond, using only duration, if its yield to maturity declined by 200 basis points. Do not round intermediate calculations. Round your answer to two decimal places. Use a minus sign to enter negative…
Use the table for the question(s) below. Consider the following four bonds that pay annual coupons: Coupon Bond Years to maturity YTM A 1 0% 5% B 6% 7% C 10 10% 9% D 20 0% 8% The percentage change in the price of the bond "A" if its yield to maturity increases from 5% (Price0) to 6% (Price1) is closest to: О А. 4%. В. - 1%. C. - 4%. OD. - 6%. O O O O
Consider the characteristics of two annual pay bonds from the same issuer with the same priority in the event of default: You also observe the following spot interest rates from the current yield curve: Par value Coupons Maturity Coupon rate Yield to maturity Price Bond A $100 Annual 3 yrs 8% 10.25% 94.43 1 2 3 Bond B $100 Annual 3 yrs 4% 10.35% 84.31 Term (yrs) Spot Rates (zero coupon, %) 4% 7 10 Neither bond's price is consistent with the spot rates. Using the information in these displays, recommend either Bond A or Bond B for purchase. Justify your choice. Do not round intermediate calculations. Round your answers to the nearest cent. The non-arbitrage price of Bond A: $ The non-arbitrage price of Bond B: $ -Select- ✓ appears to be the better purchase.
Also how would this look in excel using function
Consider the following yields to maturity on various one-year zero-coupon securities: Yield (%) Security Treasury АAА Corporate ВBB Cогрorate B Corporate 3.5 3.7 4.5 5.1 The price (expressed as a percentage of the face value) of a one-year, zero-coupon, corporate bond with a BBB rating is closest to: ..... A. 76.56 B. 114.83 О С. 95.69 D. 133.97
The current zero-coupon yield curve for risk-free bonds is as follows: . What is the price per $100 face value of a four-year, zero-coupon, risk-free bond? Data table (Click on the following icon D in order to copy its contents into a spreadsheet.) Maturity (years) 1 2 4 YTM 5.02% 5.46% 5.79% 5.99% 6.03% Print Done
Problem: You are given the following data for two bonds with semiannual payments (A and B) Bond Settlement Date B 2/15/2020 2/15/2020 Maturity Date Coupon rate 2/15/2040 2/15/2040 4% 8% Similar bonds with 20 year to maturity sell for 9% coupon rates in the market. a) Calculate the bond value for bond A and B b) Calculate the YTM for bond A and B Bond Valuation Settlement Date 2/15/2020 2/15/2020 Maturity Date Coupon rate Required return Redemption Value Frequency Basis Calculate the PV of the bond in U.S. S 2/15/2040 2/15/2040 8% 4% 4.50% 4.50% 100 100 2 a) Use the Price Function B) Use the Yield Function
Compute yield-to-maturity for the following zero-coupon bonds: 1-year zero-coupon bond, traded currently at 980 dollars 2-years zero-coupon bond, traded currently at 920 dollars 3-years zero-coupon bond, traded currently at 840 dollars Assume that all 3 bonds have the same nominal: 1000 dollars. Using YTMs calculated plot the yield curve.
Please answer 6D.
The tables below show, respectively, the characteristics of two annual-pay bonds from the same issuer with the same priority in the event of default, and spot interest rates. Neither bond’s price is consistent with the spot rates. Using the information in these tables, recommend either bond A or bond B for purchase. Bond Characteristics Bond A Bond B Coupons Annual Annual Maturity 3 years 3 years Coupon rate 10% 6% Yield to maturity 10.65% 10.75% Price 98.40 88.34 Spot Interest Rates Term (Years) Spot Rates (Zero-Coupon) 1 5% 2 8 3…
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