5. Calculate the yield to maturity for the following bonds. SHOW YOUR WORK. (4 marks) a) 4-year Canada 5.50% semi-annual, priced at 97.74 Mode N= P/Y C/Y= PMT- FV= PV = 1/Y= Layout Garly Now on Maling Help ANA SEED * A-2A-23: 29 pid- ABC Alba AaBl AaBb AaBbce 11No. Hing2 dag ein G 2020 FIXED INCOME ASSIGNMENT VERSION B 23 perrible marks worth 75% Short Answer Questions 1. Explain the relationship between a bond's fixed coupon rate and its yield to maturity. (2 marks) Ans coupon rate in the fixed rate of bond whach is pay on face value of every year and add the actual rate of bond that earns when all things cqual coupon sate in connected to its YTM When cooperate increase then yold creast, when coupon rate decrease that yield alto decline bu yadd increase then bondale decrease and when yield decrease the bood cances 2.xcar bood has a yield to muturity of ox Which would result in the wallesche thread price, a rise to 7 or a full to 5987 Why? (marks) 3. Suppose a recently published report indicates inflation in both Canada and the US. I becoming excessive and the Canadian dollar is weakening. You hear news report that the band prices are falling Which of the following Canadian bonds would experience the lowest price decrease? Why? (4 maria) Low compon short-term Ligh coupon, long term ilichopom short lv Low.com o ! to reach SAMSUNG FO NY BC 3 0 B 7 GO 8 9 5 6 O U T E R G H D F M B N V 2. 8 year bond has a yield to maturity of 6%. Which would result in the smallest % change in the bond's price, a rise to 7% or a fall to 5%? Why? (2 marks)