Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Bond valuation: here is the file again. for bond valuation thanks f#1. Current Price $ 800.00 $ 865.49 $ 1,220.00 $ 747.48 $ $ $
Bond valuation: here is the file again. for bond valuation thanks
\f#1. Current Price $ 800.00 $ 865.49 $ 1,220.00 $ 747.48 $ $ $ $ Face Amount 48,000,000 32,000,000 100,000,000 64,000,000 Par Value $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ $ $ $ 2014 Coupon Face Amount Annual YTM Payments 48,000,000 $ 45.00 32,000,000 $ 82.50 100,000,000 $ 126.25 64,000,000 $ 73.75 Coupon Rate 4.50% 8.25% 12.625% 7.375% 2014 Current 1/1/2015 Yield Expected Price 5.625% 9.532% 10.348% 9.866% #4 $ $ $ $ Face Amount 48,000,000 32,000,000 100,000,000 64,000,000 $ $ $ $ 6% 724.00 741.91 1,049.26 635.51 $ $ $ $ 8% 614.17 563.76 793.56 472.43 Yrs to Maturity Date Maturity Bond Rating 12/31/2018 5 A+ 12/31/2028 15 A+ 12/31/2038 25 A+ 12/31/2038 25 A+ $ $ $ $ Interest 10% 523.80 446.17 634.39 374.13 2014 Capital Gain Yield 2015 Total Yield Difference $ $ $ $ 12% 449.10 365.65 527.68 309.69 $ $ $ $ 14% 387.11 308.49 451.68 264.44 $ $ $ $ 336.89 433.42 597.58 371.07 % change -33.69% -43.34% -59.76% -37.11% Instructions for #4 The committee chair states that interest rates change over time which causes interest rate risk. She asks you to identify the bond that has the most price risk. (Hint: for each bond, compare the values at interest rates of 6, 8, 10, 12 and 14 percentStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started