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, current
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?
3. Pakistan bank issues a 10-year treasury bond at 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) price
c) current yield
d) yield to maturity.
4. ABC corporation has issued 12 percent annual coupon 1000 Rupees par value bonds maturing in 10 years. What should be the current price of this bond if the interest rate is 15 percent?
5. Vermex bonds currently sell for 975 Rupees which has got 7 years' maturity with a 12 percent annual coupon and have a per value of 1000 Rupees. What is their YTM? What is their current yield.
NOTE: Kindly solve step by step these all one by one for my understanding.
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