BOND

WORKSHOP

Today is $1$ Jan $2015$ and GE issued $$200m$ worth of $20-$year bonds with a $5\%$ coupon rate. As is typical of most bonds, the interest is paid semi$-$annually. As you examine this bond, you believe that the correct rate of return that you should expect on a bond of this level of risk and length of term is a $5\mathrm{.}00\%YTM.$

How much will you pay if you buy a single bond? $$1000,$ as it will sell for par

What is the face value $($maturity value, terminal value, par value$)$ of this bond? $$1000$

Which of the five Excel variables $($functions$)$ is 'face value'? FV $($future value$)$

How often will GE make interest payments? Every $6$ months

What is the coupon rate? per semi$-$annual period