Question
Castor owns one bond A and one bond B. The total value of these two bonds is 1,402.28 dollars. Bond A pays semi-annual coupons, matures
Castor owns one bond A and one bond B. The total value of these two bonds is 1,402.28 dollars. Bond A pays semi-annual coupons, matures in 10 years, has a face value of 1,000 dollars, and pays its next coupon in 6 months. Bond B pays annual coupons, matures in 12 years, has a face value of 1,000 dollars, has a yield-to-maturity of 6.54 percent, and pays its next coupon in one year. Both bonds have a coupon rate of 4.26 percent. What is the yield-to-maturity for bond A? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
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Arjen owns investment A and 1 bond B. The total value of his holdings is 2,305 dollars. Investment A is expected to pay annual cash flows to Arjen of 277.92 dollars per year with the first annual cash flow expected later today and the last annual cash flow expected in 6 years from today. Investment A has an expected return of 10.28 percent. Bond B pays semi-annual coupons, matures in 21 years, has a face value of $1000, has a coupon rate of 9.6 percent, and pays its next coupon in 6 months. What is the yield-to-maturity for bond B? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
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