1. Find and all characteristics of the bond Symbol IBM4773082 by using this source http://finra-markets.morningstar.com/

Terms:

Issue date

Maturity date

The bonds will be paid in ____ years.

Face value

Annual coupon

Issue price

Yield to maturity

Coupons of $____will be paid semi-annually/annually

Rating

What is the price (expressed as a percentage of the face value) of the Bond?

Would you like to buy it today? is it traded at par/discount or premium? Is it a junk bond? Explain.

2. The H&H Computer Company has an outstanding issue of bond with a par value of $1,000, paying 12 percent coupon rate semiannually. The bond was issued 25 years ago and has 5 years to maturity. What is the value of the bond assuming 14 percent rate of interest? Is it traded on par ?

3. A BBB-rated corporate bond has a yield to maturity of 8.2%. A U.S. Treasury security

has a yield to maturity of 6.5%. These yields are quoted as APRs with semiannual

compounding. Both bonds pay semiannual coupons at a rate of 7% and have five

years to maturity.

a. What is the price (expressed as a percentage of the face value) of the Treasury

bond?

b. What is the price (expressed as a percentage of the face value) of the BBB-rated

corporate bond?

c. What is the credit spread on the BBB bonds?