Question
1. A 6 year bond with 1000 Rupees par value pays 80 Rupees interest annually and sells for 950 Rupees. What is the coupon rate,
1.A 6 year bond with 1000 Rupees par value pays 80 Rupees interest annually and sells for 950 Rupees. What is the coupon rate, current yield and yield to maturity?
2.A firm sells bonds with a par value of 1000 Rupees, carry a 8% coupon rate, with a maturity period of 9 years. The bond sells at a yield to maturity of 9%.
a.What is the interest payment you should receive each year?
b.What is the selling price of the bond?
c.What will happen to the bond price, if the yield to maturity falls to 7%?
3.Pakistan bank issues a 10 year treasury bondat 12% coupon with the par value of 1000 Rupees. If the market yield increases shortly afterwards, what happens to the following parameters:
a)coupon rate b) pricec) current yieldd) yield to maturity.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started