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
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
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: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
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