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Based on the following YTM for the various maturities, what price are these government bonds trading at? 2.64% 2.38% 100 4 $99.02 M emi-ann ce valu aturity rice YTM Semi-ann Face valu Maturity Price 2.17% 2% 100 2 -$99.67 YTM Semi-ann Face valu Maturity Price 3% 5.50% 100 20 -$137.39

Based on the following YTM for the various maturities, what price are these government bonds trading at? 2.64% 2.38% 100 4 $99.02 M emi-ann ce valu aturity rice YTM Semi-ann Face valu Maturity Price 2.17% 2% 100 2 -$99.67 YTM Semi-ann Face valu Maturity Price 3% 5.50% 100 20 -$137.39

Essentials Of Investments
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
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## Government Bonds Pricing Analysis ### Question: Based on the following YTM for the various maturities, what price are these government bonds trading at? ### Data Table Explanation: #### Bond 1: - **Yield to Maturity (YTM):** 2.64% - **Semi-annual Yield:** 2.38% - **Face Value:** $100 - **Maturity:** 4 years - **Price:** $99.02 #### Bond 2: - **Yield to Maturity (YTM):** 2.17% - **Semi-annual Yield:** 2% - **Face Value:** $100 - **Maturity:** 2 years - **Price:** $99.67 #### Bond 3: - **Yield to Maturity (YTM):** 3% - **Semi-annual Yield:** 5.50% - **Face Value:** $100 - **Maturity:** 20 years - **Price:** $137.39 ### Analysis: This table provides a comparison of three government bonds with different maturities and yields, illustrating how these factors influence the trading price of each bond. The prices are calculated based on the given YTM and semi-annual yields, reflecting their market value relative to the face value of $100. The highlighted prices indicate the current trading amounts for these bonds.
Transcribed Image Text:## Government Bonds Pricing Analysis ### Question: Based on the following YTM for the various maturities, what price are these government bonds trading at? ### Data Table Explanation: #### Bond 1: - **Yield to Maturity (YTM):** 2.64% - **Semi-annual Yield:** 2.38% - **Face Value:** $100 - **Maturity:** 4 years - **Price:** $99.02 #### Bond 2: - **Yield to Maturity (YTM):** 2.17% - **Semi-annual Yield:** 2% - **Face Value:** $100 - **Maturity:** 2 years - **Price:** $99.67 #### Bond 3: - **Yield to Maturity (YTM):** 3% - **Semi-annual Yield:** 5.50% - **Face Value:** $100 - **Maturity:** 20 years - **Price:** $137.39 ### Analysis: This table provides a comparison of three government bonds with different maturities and yields, illustrating how these factors influence the trading price of each bond. The prices are calculated based on the given YTM and semi-annual yields, reflecting their market value relative to the face value of $100. The highlighted prices indicate the current trading amounts for these bonds.
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