ATTEND THE QUESTION ONLY IF YOU CAN SOLVE ALL THE QUESTIONS. AWARE OF CHEGG POLICIES SO DO NOT SAY ONLY ONE CAN BE DONE.

ANSWER ALL OR MAKE WAY TO OTHERS TO ANSWER.

WILL REPORT THE ANSWER IF ONE IS ANSWERED.

Clifford Clark is a recent retiree who is interested in investing some of his savings in corporate bonds. His financial planner has suggested the following bonds:

Bond A has a 13% annual coupon, matures in 12 years, and has a $1,000 face value.

Bond B has a 10% annual coupon, matures in 12 years, and has a $1,000 face value.

Bond C has a 7% annual coupon, matures in 12 years, and has a $1,000 face value.

Each bond has a yield to maturity of 10%.

Before calculating the prices of the bonds, indicate whether each bond is trading at a premium, at a discount, or at par.

Calculate the price of each of the three bonds.

Calculate the current yield for each of the three bonds. (two decimal places.

If the yield to maturity for each bond remains at 10%, what will be the price of each bond 1 year from now?

What is the expected capital gains yield for each bond? What is the expected total return for each bond?

Mr. Clark is considering another bond, Bond D. It has a 9% semiannual coupon and a $1,000 face value (i.e., it pays a $45 coupon every 6 months). Bond D is scheduled to mature in 8 years and has a price of $1,170. It is also callable in 6 years at a call price of $1,030.

What is the bond's nominal yield to maturity

What is the bond's nominal yield to call?

Calculate the price of each bond (A, B, and C) at the end of each year until maturity, assuming interest rates remain constant.

What is the expected current yield for each bond in each year? Round your answers to two decimal places.

What is the expected capital gains yield for each bond in each year?

What is the total return for each bond in each year?

Years Remaining
Until Maturity		Bond A	Bond B	Bond C
12
11
10
9
8
7
6
5
4
3
2
1
0