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1) You are looking at a bond with 22 years to maturity, has a coupon rate of 5%, a yield to maturity of 6.5%, and
1) You are looking at a bond with 22 years to maturity, has a coupon rate of 5%, a yield to maturity of 6.5%, and the coupon is paid semi- annually. What is the price of the bond? 2) You are looking at a bond with 13 years to maturity, has a coupon rate of 4% paid semi-annually, and a price of 105. What is the Yield to Maturity of the bond? 3) You are looking at a bond with 17 years to maturity, has a coupon rate of 8%, a yield to maturity of 5%, and the coupon is paid once annually. What is the price of the bond? 4) For this question you will be using the FINRA website we reviewed in class. The link to the website is on slide 35. Your task will be to select two different bonds. The bonds must be issued by different companies and should not be the same bonds as your friends have selected. I recommend just randomly selecting bonds as the best approach. For each bond answer the following: What is the organization's name? What is the bond's symbol? What is the coupon rate? What is the last price? What is the last yield? What is the bond type? What is the bond rating (not all bonds are rated)? Is the bond callable? Based on the information you gathered, which bond would you invest in and why? There is not a right or wrong answer to this question, you but should have logic behind your answer. 5) Question #2 from homework #5 provided to be difficult. Very few students were able to solve it with the Excel financial formulas. So you have the opportunity to try again. See the solution from the last homework for the right approach. ABC bank pays 12% interest compounded monthly. If you deposit $2,500 into the account today, how much interest will you earn in one year? What is the EAR
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