An investor looks at today’s yield to maturities in the Wall Street Journal for debt with 10 year maturities. He observes the following: Rating AAA AA A BBB BB YTM 4.36% 4.60% 4.75% 4.95% 5.15% Exxon Mobil (XON) has debt that is AAA rated. Suppose an investor wants to value Exxon bonds that will mature in 10-years. He sees one Exxon bond that pays a 7.125% annual coupon with a face value of $1,000. Bond prices are often quoted as a percentage of $100 face value increments. How would you quote your results from Part A? (express answer as a percentage, xx.xx%, of par)
An investor looks at today’s yield to maturities in the Wall Street Journal for debt with 10 year maturities. He observes the following: Rating AAA AA A BBB BB YTM 4.36% 4.60% 4.75% 4.95% 5.15% Exxon Mobil (XON) has debt that is AAA rated. Suppose an investor wants to value Exxon bonds that will mature in 10-years. He sees one Exxon bond that pays a 7.125% annual coupon with a face value of $1,000. Bond prices are often quoted as a percentage of $100 face value increments. How would you quote your results from Part A? (express answer as a percentage, xx.xx%, of par)
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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An investor looks at today’s yield to maturities in the Wall Street Journal for debt with 10 year maturities. He observes the following: Rating AAA AA A BBB BB YTM 4.36% 4.60% 4.75% 4.95% 5.15% Exxon Mobil (XON) has debt that is AAA rated. Suppose an investor wants to value Exxon bonds that will mature in 10-years. He sees one Exxon bond that pays a 7.125% annual coupon with a face value of $1,000.
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