12:15 1 Done 5 of 5 If a bond's yield-to-maturity is greater than the appropriate yield-to- maturity, the bond will have a NPV. FINC 326: Cumulative Assignment Part 3 Please show the formula and all steps for full credit (10 points in total). 22. 0.5 point A bond has an expected yield-to-maturity of 6% and an 10% probability of default. If the bond defaults, the bondholders should receive 80% of the market value. If fairly priced, the bond should have a promised yield-to- maturity of A. show the Formula (0.2 point) B. Show the steps (0.2 point) C. Present the Answers (0.1 point) 23. 0.1 point Active bond portfolio managers assume the bond market is 24. 0.1 point If a bond's price is below its par value, its coupon rate will be than its yield-to maturity. 25. 0.1 point If a bond's market price increases, its yield to maturity 26. 0.1 point A pricing theorem for the bond market states that if a bond's yield does not change over its life, then the size of its discount or premium will at an increasing rate as its life gets shorter. 27. 0.1 point Holding maturity constant, a bond's duration is higher when the coupon rate is be 28. 0.6 point A bond has a duration of 9 years and a present yield-to-maturity of 89. If the yield-to-maturity rises to 10%, the approximate bond price change would A. Show the Formula (0.2 point) B. Show the steps and calculation (0.3 point) C. Present the Answers (0.1 point) 29. 1.1 point A four-year $1,000 bond will pay $70 in interest at the end of each year. With a yield-to-maturity of 83, its present market price is $934. Its duration A. Show the Formula of duration (0.1 point) B. Create the Table (0.6 point) C. Show the steps to get the market price (0.2 point) D. Show the steps to get the duration (0.2 point) FINC 326: Cumulative Assignment Part 3 Please show the formula and all steps for full credit TIL