Bond Price: i) For a six-year zero coupon bond with $100 par value and 8% annually compounded yield to maturity, the price is closest to: w. Free B. 108.00 D A. 63.02 C. 92.21 0 Suppose that a portfolio manager purchases $5 million of par value of a four-year bond that has a coupon rate of 4% and pays interest once per year. The first annual coupon payment will be made one year from now. ii) How much will the portfolio manager have if she (1) holds the bond until it matures four years from now, and (2) can reinvest all the annual interest payments at an annual interest rate of 3.50%? 200 N=4 H4 14:35 M. 02. Te dollars Fr: 6 st millim dollers 5842988-58 i) If the required rate of retum is exactly the same as the reinvestment rate (3.50%), what will be the price of that bond (with $5 million of par value)? - [4+257*-1]+m P = 5.092 million 11 $25 v) Calculate for each of the following bonds the price per $1,000 of par value assuming semiannual coupon payments. Bond Coupon Rate(%) Years to Maturity Required Yield % Price A 11 55 21 42 $ 1000 L B 515 7 14 7 35 $ 890.191 Consider a bond with face value of $1,000, a YTM of 6%, coupon rate of 4% (semiannually paid), and initial maturity of 7 years. The bond was issued on 3/1/2016, and bought on 5/15/2018. What is the price of the bond on 5/15/2018? 26.5 muthi X 750.4076 184 16 Zz