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Below is the listing of a bond issued by BOEING Company (BA). Below the detail of the bond is the information on a recent

 

Below is the listing of a bond issued by BOEING Company (BA). Below the detail of the bond is the information on a recent sale of part of the bond issue. Explain what the price of $101.245 a $100 par value bond means in this purchase. Explain how the yield to maturity of 6.494% is calculated. Contrast that with the calculation of the current yield of 6.544%. Explain why it matters to know if the bond pays interest monthly, semi-annually or annually. This bond does not mature for almost 15+ years. Explain the concept of interest rate risk in context with this bond for both the issuer and the investor. Rating Issuer Baa2 /BBB- BOEING CO Moody's Current Yield 6.544% Dated 02/24/1998 Coupon 6.625% Maturity Price 12/15/2038 $101.245 Minimum Size 1K Coupon Pd Semi-Annual Yield to Maturity 6.494% Callable No

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