Consider a coupon bond which has a $50,000 par value and a coupon rate of 20%. The bond is currently selling for $115,000 and has 16 years to maturity. Calculate the bond’s yield to maturity.
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Consider a coupon bond which has a $50,000 par value and a
coupon rate of 20%. The bond is currently selling for $115,000
and has 16 years to maturity. Calculate the bond’s yield to maturity.
*Formula and Solution not in excel
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- Please show work without calc or excel. In other words the actual equation.A treasury bond with $100 maturity face value has a $9 annual coupon, and 15 years left to maturity. What price will the bond sell for assuming that the 15 year yield to maturity in the market is 4%, 9%, and 14% respectively. (Show working out, without the use of external software such as excel or stata) Explain whether the price movements would have been greater or smaller if a 10 year bond had been used rather than a 15 year one without any further calculations.General Electric has just issued a callable (at par) 10- year, 5.7% coupon bond with annual coupon payments. The bond can be called at par in one year or anytime thereafter on a coupon payment date. It has a price of $ 102.15. a. What is the bond's yield to maturity? b. What is its yield to call? c. What is its yield to worst? Question content area bottom enter your response here %. (Round to two decimal places.)
- Consider a two-year coupon bond issued by an airline with Face Value of $1,000, Coupon Rate of 3%, Annual Default Probability of 5%, & Risk-Free Interest Rate of 3% per year. Use a binomial tree to value the bond assuming no recovery. Show your work & write your answer in dollars and cents below. The value (price, expected present value, etc.) of the bond is _______.Please include the excel formula You find a zero coupon bond with a par value of $10,000 and 24 years to maturity. If the yield to maturity on this bond is 4.2 percent, what is the dollar price of the bond? Assume semiannual compounding periods. Input area: Settlement date 1/1/2020 Maturity date 1/1/2044 Coupon rate 0.00% Coupons per year 2 Redemption value (% of par) 100 Yield to maturity 4.20% Par value $10,000 (Use cells A6 to B12 from the given information to complete this question. You must use the built-in Excel function to answer this question. Leave the “Basis” input blank in the function. You may enter a constant as a hard coded value.) Output area: Price (% of par) Price← Suppose a seven-year, $1,000 bond with an 8.4% coupon rate and semiannual coupons is trading with a yield to maturity of 6.65%. a. Is this bond currently trading at a discount, at par, or at a premium? Explain. b. If the yield to maturity of the bond rises to 7.05% (APR with semiannual compounding), what price will the bond trade for? a. Is this bond currently trading at a discount, at par, or at a premium? Explain. (Select the best choice below.) O A. Because the yield to maturity is less than the coupon rate, the bond is trading at a premium. B. Because the yield to maturity is greater than the coupon rate, the bond is trading at par. OC. Because the yield to maturity is greater than the coupon rate, the bond is trading at a premium. D. Because the yield to maturity is less than the coupon rate, the bond is trading at a discount.
- Do not use excel, use formulas to compute the question You have two bonds, Bond A and bond B: A 3-year zero-coupon bond with face value of $1,000 with a yield-to-maturity of 4%. A 6-year bond with an annual coupon payment C (to be paid out starting a year from now), a face value of $1,000 and yield-to-maturity of 5%. Assume that compounding takes place annually. If the price of Bond A is equal to the price of Bond B, what is the value of Bond B’s coupon payments (C)?Conceptual Overview: Explore the value of fixed-interest coupon bonds of different terms. This graph shows the value of 10% coupon bonds of different terms across differing market interest rates. Each bond pays INT = $100 at the end of each year and returns M = $1,000 at maturity. For comparison, the blue line depicts the value of a one-year bond. The term of the other bond in years may be changed using the slider. Drag on the graph to change the current market interest rate (rd) at which the bond (orange curve) is evaluated. ∑ t = 1 Y r s I N T ( 1 + r d ) + M ( 1 + r d ) = ∑ t = 1 1 5 $ 1 0 0 ( 1 + 0 . 1 0 0 ) + $ 1 0 0 0 ( 1 + 0 . 1 0 0 ) = 1 , 0 0 0 ∑ t=1 Yrs (1+r d ) t INT + (1+r d ) Yrs M =∑ t=1 15 (1+0.100) t $100 + (1+0.100) 15 $1000 =1,000 ∑t=1Yrs(1+rd)tINT+(1+rd)YrsM=∑t=115(1+0.000)t$100+(1+0.000)15$1000=2,500. 1. What is the value of a 15-year 10% $1,000 coupon bond when the market interest rate is 15%? $421$708$1,000$1,5192. What is the value of a 12-year 10% $1,000…Give typing answer with explanation and conclusion Consider a 6% semiannual coupon payment bond with five years to maturity currently priced at par (YTM = 6.00%). Using a 30 bp increase and 30 bp decrease in yield to maturity, calculate the approximate convexity for this bond.
- Compute the price of a risk-free bond with a face value of $1,000 that has seven years left to maturity, a coupon rate of 5%, and annual interest payments. Assume it just made a coupon payment (i.e., it has seven annual payments left). The current term structure of risk-free rates is provided below. Face value Coupon rate $ 1,000.00 5.00% Term structure Maturity 1 2 3 4 5 6 7 Risk-free yields 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% Coupon payment Face value Cash flows PV (CF) PriceFind the duration of a bond with a settlement date of May 27, 2023, and maturity date November 15, 2034. The coupon rate of the bond is 8.5%, and the bond pays coupons semiannually. The bond is selling at a bond-equivalent yield to maturity of 10.0%. Use Spreadsheet 16.2. (Do not round intermediate calculations. Round your answers to 4 decimal places.) Macaulay duration Modified durationPlease answer all questions with explanations thx.
