Bonds. 8% semiannual coupon and bars in our face value it is $40 coupon every six months. Bondi is scheduled to meet you in seven years in a price of $1210. It also is called a boy in five years with a car price of $1090
Question E Mr. Clark is considering another Bond, Bond D. It has an 8% semi annual coupon and a $1000 face value (I.e. it pays $40 coupon every six months). Bondi has scheduled to mature in seven years and has a special price of $1210. It is also is callable in 5 years add a call price of $1090. this is the whole Equation
Create a graph showing the time path of each bond's value. Choose the correct graph. The correct graph is A. Tume Paths of Bota Band $1,400 Time Paths of Bonds A, B, and $1,400 51.300 51.200 51.000 $1,000 5300 5800 Honda Honda 5600 5600 5400 $100 5.300 SO 50 Tamil Marum BA Bood Years Remailing Cantity Bood Bed A Bond Band C. Tierno Bonde ....C TiePaths of Doods A, B, C 51400 51.400 51.200 51.300 $1,000 51000 5300 5800 Wond 1000 5600 5400 5400 5300 5300 30 12 SO Ten My BA Bood Years Rig wil Maturity BA Bond Bed E F G H 8% A B F e. Mr. Clark is considering another bond, Bond D. Years to maturity 7 Number of coupon payment per year 2 Coupon rate Par value $1,000 e Coupon payment $40 Current price $1,210 Call price $1,090 5 Years until bond is callable 5 5 Formulas (1) Calculating the bond's nominal yield to maturity #N/A (2) Calculating the bond's nominal yield to call #N/A 9 f. Determining which of the bonds has the most price risk and which has the most reinvestment risk Bond 1 Bond 2 Bond 3 Bond 4 2 Years to maturity 1 5 5 10 3 Number of coupon payment per year 1 1 1 Coupon rate 10% 10% 10% 5 Par value $1,000 $1,000 $1,000 $1,000 3 Price at YTM = 10% 3 Price at YTM = 11% % Price Change Bond 5 10 $1,000 51 - Calculating the price of each bond (A, B, and C) at the end of each year until maturity, assuming interest rates remain con Years Remaining Until Maturity Bond B Bond C constant 52 53 Bond A 54 55 56 57 58 59 60 61 62 63 64 65 66 12 11 10 9 8 7 6 5 4 3 2 1 0 67 Creating a graph showing the time path of each bond's value 68 09 70 71 72 73 74 75 70 77 r. Clark is considering another bond, Bond D. It has an 8% semiannual coupon and a $1,000 face value (ie.. it paysa 1. What is the bond's nominal yield to maturity? Round your answer to two decimal places. % 2. What is the bond's nominal yield to call? Round your answer to two decimal places. % Create a graph showing the time path of each bond's value. Choose the correct graph. The correct graph is A. Tume Paths of Bota Band $1,400 Time Paths of Bonds A, B, and $1,400 51.300 51.200 51.000 $1,000 5300 5800 Honda Honda 5600 5600 5400 $100 5.300 SO 50 Tamil Marum BA Bood Years Remailing Cantity Bood Bed A Bond Band C. Tierno Bonde ....C TiePaths of Doods A, B, C 51400 51.400 51.200 51.300 $1,000 51000 5300 5800 Wond 1000 5600 5400 5400 5300 5300 30 12 SO Ten My BA Bood Years Rig wil Maturity BA Bond Bed E F G H 8% A B F e. Mr. Clark is considering another bond, Bond D. Years to maturity 7 Number of coupon payment per year 2 Coupon rate Par value $1,000 e Coupon payment $40 Current price $1,210 Call price $1,090 5 Years until bond is callable 5 5 Formulas (1) Calculating the bond's nominal yield to maturity #N/A (2) Calculating the bond's nominal yield to call #N/A 9 f. Determining which of the bonds has the most price risk and which has the most reinvestment risk Bond 1 Bond 2 Bond 3 Bond 4 2 Years to maturity 1 5 5 10 3 Number of coupon payment per year 1 1 1 Coupon rate 10% 10% 10% 5 Par value $1,000 $1,000 $1,000 $1,000 3 Price at YTM = 10% 3 Price at YTM = 11% % Price Change Bond 5 10 $1,000 51 - Calculating the price of each bond (A, B, and C) at the end of each year until maturity, assuming interest rates remain con Years Remaining Until Maturity Bond B Bond C constant 52 53 Bond A 54 55 56 57 58 59 60 61 62 63 64 65 66 12 11 10 9 8 7 6 5 4 3 2 1 0 67 Creating a graph showing the time path of each bond's value 68 09 70 71 72 73 74 75 70 77 r. Clark is considering another bond, Bond D. It has an 8% semiannual coupon and a $1,000 face value (ie.. it paysa 1. What is the bond's nominal yield to maturity? Round your answer to two decimal places. % 2. What is the bond's nominal yield to call? Round your answer to two decimal places. %
