Consider the prices of the following three Treasury issues as of February 24, 2021: Change Yield 5.39 -12 Bid Ask 110:10 110:12 103:10 103:12 134:25 134:31 -6 5.35 -20 5.43 Coupon 7.270 8.470 12.330 Maturity May 2025 May 2025 May 2025 The bond in the middle is callable in February 2022. What is the implied value of the call feature? (Hint: Is there a way to combine the two non-callable issues to create an issue that has the same coupon as the callable bond?) (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) $12.74 Call value

Consider the prices of the following three Treasury issues as of February 24, 2021: Change Yield 5.39 -12 Bid Ask 110:10 110:12 103:10 103:12 134:25 134:31 -6 5.35 -20 5.43 Coupon 7.270 8.470 12.330 Maturity May 2025 May 2025 May 2025 The bond in the middle is callable in February 2022. What is the implied value of the call feature? (Hint: Is there a way to combine the two non-callable issues to create an issue that has the same coupon as the callable bond?) (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) $12.74 Call value

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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Suppose the following bond quote for IOU Corporation appears in the financial page of today's newspaper. Assume the bond has a face value of $2,000, and the current date is April 15, 2019. Company (Ticker) IOU (1OU) Last Last EST Vol Coupon 7.65 Maturity Apr 15, 2038 Price Yield (000s) 105 93.013 ?? a. What is the yield to maturity of the bond? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b.What is the current yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.., 32.16.) а. Yield to maturity b. Current yield
Suppose the following bond quotes for IOU Corporation appear in the financial page of today's newspaper. Assume the bond has a face value of $2,000 and the current date is April 19, 2021. Company (Ticker) IOU (IOU) Coupon 5.1 a. YTM b. Current yield Maturity April 19, 2037 % % Last Price 106.85 Last Yield 22 a. What is the yield to maturity of the bond? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b.What is the current yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) EST volume (000s) 1,833
Suppose the following bond quote for IOU Corporation appears in the financial page of today's newspaper. Assume the bond has a face value of $2,000, and the current date is April 19, 2022. Company (Ticker) IOU (IOU) Coupon Maturity 7.60 April 19, 2042 a. Yield to maturity b. Current yield Estimated Last Price Last Yield Volume (000s) 92.996 ?? a. What is the yield to maturity of the bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the current yield? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. % % 103
Consider the following $1,000 face value bond which makes semi- annual coupon payments, Bond CIBC Coupon rate 10.5% Price 104.79 Maturity December 1, 2030 Settlement Date January 27, 2019 What is the total price you would pay for this bond? Enter your answer rounded to two decimal places.
Consider Bond AAA Coupon rate: 10,5% per year Yield to maturity: 7,955% per year Settlement date: 29 May 2022 Maturity date: 8 November 2052 What is the value of n, the number of half years from the next coupon date until maturity? A. 30 B. 60 C. 47 D. 58
You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2022. The bonds have a par value of $2,000 and semiannual coupons. Company (Ticker) Xenon, Incorporated (XIC) Kenny Corporation (KCC) Williams Company (WICO) Coupon 5.800 7.160 ?? a. Price b. Current yield Maturity January 15, 2038 January 15, 2032 January 15, 2034 X Answer is complete but not entirely correct. $ 2,249.62 X 6.71 X % Last Price Last Yield 94.231 ?? 94.775 a. What price would you expect to pay for the Kenny Corporation bond? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the bond's current yield? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. ?? 6.10 6.92 Estimated $ Volume (000s) 57,366 48,945 43,806
Given the following information, why is one bond’s yield higher than the other’s? Which bond is riskier? Why? Please also indicate whether each bond is traded at par, discount, or premium and explain why. Issuer Name Coupon Maturity Rating Moody's/S&P/Fitch Yield % GENERAL MOTORS 7.000% Nov 2025 Ba1/BB+/BB+ 6.313 GENERAL MOTORS 8.000% Nov 2031 Ba1/BB+/BB+ 6.838
Integrated Mini Case: HEDGING INTEREST RATE RISK WITH FUTURES CONTRACTS Use the following December 31, 2021 market value balance sheet for Bank One to answer the questions below. Assets (in thousands of $s) Liabilities/Equity (in thousands of $s) Value Duration Value Duration T-bills $1,500 0.75 NOW accounts $ 6,250 0.50 T-bonds 4,250 9.50 CDs 7,500 7.55 Loans 15,500 12.50 Federal funds 5,500 0.10 Equity 2,000 The bank’s manager thinks rates will increase by 0.50 percent in the next 3 months. To hedge this interest rate risk the manager will use June T-bond futures contracts. The T-bonds…
A Treasury bond futures contract has a settlement price of 89'08. What is the implied annual yield?
pm.2
The following is a T-bond quote (par value $1,000) from the WSJ (8/31/2018). Use the information in the quote to answer the question. Maturity Coupon Bid Asked Chg Asked Yield 8/31/2,034 11.68 104:15 104:20 -14 ??? How much is the premium or discount of this bond? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16). Use a negative sign to represent a discount.)
To calculate the number of years until maturity, assume that it is currently May 2019. All of the bonds have a $1,000 par value and pay semiannual coupons. Maturity Mo/Yr Ask Yld Rate Asked 103.5362 103.8235 Bid Chg +.3204 ?? May 25 2.18 5.850 May 27 103.1840 103.3215 +.4513 ?? 6.125 May 36 ?? ?? +.6821 3.87 a. In the above table, find the Treasury bond that matures in May 2036. What is the asked price of this bond in dollars? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If the bid-ask spread for this bond is .0628, what is the bid price in dollars? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Asked price b. Bid price

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