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13. Bond listings and yield spreads Aa Aa The following bond list is from the business section of a financial newspaper on January 1, 2016.
13. Bond listings and yield spreads Aa Aa The following bond list is from the business section of a financial newspaper on January 1, 2016. Assume that each bond shown matures on January 1 in 5, 10, or 30 years. Each bond shown pays a semiannual coupon-the coupon rate is in the column labelled Coupon. The Last Price and Last Yield columns indicate each bond's price and YTM at the end of trading. EST Spread indicates the bond's spread above the relevant U.S. Treasury benchmark, expressed as a percentage. UST indicates which U.S Treasury security maturity is the relevant benchmark for each bond. EST Volume shows the number of bonds traded during the day. Notice also that prices are stated relative to a par value of $100. Assume all bonds have the same default premium. Fill in the value of The Blue Co.'s bonds. EST UST Last Price Last Yield Company Globo Inc. Coupon 8.25% Maturity 01-01-2026 Spread 2.37 (Years) 10 $97.87 8.57% Monic Corp. 5.80% 01-01-2021 $99.22 5.98% 0.58 5 EST Volume (1000s) 59,725 52,930 46,932 45,120 43,960 Allied Co. 8.98% 01-01-2026 $104.07 8.37% 2.17 10 Newtown Inc. 9.63% 01-01-2046 $88.14 10.98% 4.03 30 The Blue Co. 4.13% 01-01-2021 6.26% 0.86 5 If you were to calculate the yield on a security with a 10-year U.S. Treasury security, the yield will be equal to Which bond is trading at a premium? O Allied Co. O The Blue Co. Monic Corp. O Newtown Inc
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