3. (16 points) The following are Treasury bond quotes from Table 6-1 in your book. Assume the par value of both bonds is 10,000. The quote is as of July 16h, 2013 (although the settlement date is July 18t2013). Please use these figures to answer Question 3 Asked 3.125 5/15/2021 8/15/2022 107.1953 79.857 107 2266 79.928 2.118 2.48 The bond that matures on August 15th,2022 is a Treasury STRIP bond (a). Veritfy the asked price of the 2021 May 15th Treasury bond as of July 16h, 2013. That is show the asked price on this bond is 107.2266. The number of years between July 18h 2013 and May 15h 2021 is 7.83 years (b). Verify the asked yield of 2022 August 15h STRIP is 2.48 as of July 16.2013. The number of years between July 18 2013 and August 15 2022 is 9.082 years 4. (24 points) (a) A Treasury bond (pars $10,000) with a coupon rate of 2.5% makes semiannual payments The Wall Street Journal reports the asked price for the bond on April 1st as 99.35. If the next coupon payment is due in 105 days, what is the nvoice price of the bond on April 1st? Assume 182 days in six months (b), XYZ Co. has 7 % coupon bonds (par-1,000) making annual payments with YTM of 7.8%. The current yield on these bonds is 7.4%. Is this a premium or a discount bond? How many years do these bonds have left until they mature? (c). A bond (par-$1,000) has one year to maturity. The bond's current yield is 6 3 % and its yield to maturity (YTM) is 7%. Assume the interest is paid once a year. What is the coupon rate on the bond? What is the price of the bond today? 3. (16 points) The following are Treasury bond quotes from Table 6-1 in your book. Assume the par value of both bonds is 10,000. The quote is as of July 16h, 2013 (although the settlement date is July 18t2013). Please use these figures to answer Question 3 Asked 3.125 5/15/2021 8/15/2022 107.1953 79.857 107 2266 79.928 2.118 2.48 The bond that matures on August 15th,2022 is a Treasury STRIP bond (a). Veritfy the asked price of the 2021 May 15th Treasury bond as of July 16h, 2013. That is show the asked price on this bond is 107.2266. The number of years between July 18h 2013 and May 15h 2021 is 7.83 years (b). Verify the asked yield of 2022 August 15h STRIP is 2.48 as of July 16.2013. The number of years between July 18 2013 and August 15 2022 is 9.082 years 4. (24 points) (a) A Treasury bond (pars $10,000) with a coupon rate of 2.5% makes semiannual payments The Wall Street Journal reports the asked price for the bond on April 1st as 99.35. If the next coupon payment is due in 105 days, what is the nvoice price of the bond on April 1st? Assume 182 days in six months (b), XYZ Co. has 7 % coupon bonds (par-1,000) making annual payments with YTM of 7.8%. The current yield on these bonds is 7.4%. Is this a premium or a discount bond? How many years do these bonds have left until they mature? (c). A bond (par-$1,000) has one year to maturity. The bond's current yield is 6 3 % and its yield to maturity (YTM) is 7%. Assume the interest is paid once a year. What is the coupon rate on the bond? What is the price of the bond today
