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Bond Valuation with Duration Assumptions Conclusions Par or Face Value $1,000.00 RRR to Maturity Years to Maturity 3 Yield to Maturity Coupon Rate 4.00% Your
| Bond Valuation with Duration | ||||||
| Assumptions | Conclusions | |||||
| Par or Face Value | $1,000.00 | RRR to Maturity | ||||
| Years to Maturity | 3 | Yield to Maturity | ||||
| Coupon Rate | 4.00% | Your Intrinsic Value | ||||
| Payments/Year | 1 | |||||
| Coupon PMT Amount | Current Market Price | $1,050.00 | ||||
| Risk Free Rate to Maturity | 0.23% | Duration to Maturity | ||||
| Issuer's Risk Spread | 1.80% | |||||
| Cash Flows to Maturity | ||||||
| Maturity (Years) | Purchase Price and Par Repayment | Coupon Payments | Total Cash Flows | PV of Cash Inflows | (CF PV)x (Maturity) | |
| 0.0 | ($1,050.00) | |||||
| 1.0 | ||||||
| 2.0 | ||||||
| 3.0 | $1,000.00 | |||||
| Sum = | ||||||
| 1) Fill in all the empty boxes with the correct values. (Please add in excel formulas as well) | ||||||
| 2) Should you purchase this bond? Why? | ||||||
| 3) If RF rates go up by 10 bps and issuer's credit spread widens by 90 bps, | ||||||
| what does duration estimate the bonds value change will be? | ||||||
| Callable Bond Valuation | ||||||
| Assumptions | ||||||
| Current Market Price | (Bid 119 / Offer 120) | |||||
| Par or Face Value | $1,000 | |||||
| Call Premium | $20 | |||||
| Call Price | $1,020 | |||||
| Years to Maturity | 10 | |||||
| Years to Call | 2 | |||||
| Coupon Rate | 7.00% | |||||
| Payments/Year | 2 | |||||
| 2 Year UST Yield | 1.65% | |||||
| 10 Year UST Yield | 1.85% | |||||
| Issuer's Risk Spread (to Call) | 0.75% | |||||
| Issuer's Risk Spread (to Maturity) | 1.25% | |||||
| YTC = | ||||||
| YTM = | ||||||
| Price to Call = | ||||||
| Price to Maturity = | ||||||
| Buy or Don't Buy? Why? | ||||||
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