CHAPTER 6 ASSIGNMENT Ch6Amnt Let's use the example in your Chapter 6 Valuing Bonds Guide spreadsheet from the Resource section for this chapter, to do a few Questions and Problems You will see that problems and questions 3, 6, 4 and 5 from the textbook are solved for you in the Valuing Bonds Guide as follows 3 addresses PV where we solve for the way to Price a bond 6 same we solve for PV to get the current Price of a bond 4 addresses solving for the Yield to Maturity 5 is solved on that spreadsheet to help understand the Payment , or coupon payment, from which we derive the coupon rate , which is a percentage, always on a 1000 par With this in mind, let's setup an Excel spreadsheet which you will upload when complete , and solve a couple of problems that are like s 3 and 6 Let's just assume calculation on annual payments of interest rather than semi annual, to simplify Set them up the way you see in the guidelines then solve You are given the following data A bond has a coupon rate of 7 225, the latest yield reported of 6 23 and 8 years to maturity What is the price of the bond Let's do another for good measure A bond has a coupon rate of 6 95, the latest yield reported of 8 7 and 16 years to maturity What is the price of this bond Now let's solve 2 for Yield to Maturity, as in the example for 4 from your Chapter 6 Valuing Bonds Guide NOTE You MUST carry these rates out to 4 decimal places for precision The years to maturity on Bond Beta are 12, the coupon rate is 4 5 , and the bond current sells for $1,032 04 What is the current YTM Bond Gamma will mature 18 years from now, pays a coupon rate of 8 25 , and currently is on the market for $998 14 What is the current YTM Finally, let's solve for the coupon rate, using the example setup for 5 for PMT from your Chapter 6 Valuing Bonds Guide spreadsheet Remember to use your dollar results to interpret the percentage (to 4 decimal places as your example shows A bond issued by Beverly Hillbilly Company currently sells for $1,040, has 15 years to maturity, and shows a current YTM of 5 76 What is the coupon rate on the bond A bond for Gilligan's Famous Island Adventure, Inc , has a current market price of $974 32, matures in 5 years, and has a current YTM or 7 89 What is the coupon rate on this bond

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CHAPTER 6 ASSIGNMENT Ch6Amnt Let's use the example in your Chapter 6 Valuing Bonds Guide spreadsheet from the Resource section for this chapter, to do

CHAPTER 6 ASSIGNMENT Ch6Amnt Let's use the example in your Chapter 6 Valuing Bonds Guide spreadsheet from the Resource section for this chapter, to do a few Questions and Problems. You will see that problems and questions #3, #6, #4 and #5 from the textbook are solved for you in the Valuing Bonds Guide as follows:

#3 addresses PV where we solve for the way to Price a bond #6 - same - we solve for PV to get the current Price of a bond #4 addresses solving for the Yield to Maturity #5 is solved on that spreadsheet to help understand the Payment, or coupon payment, from which we derive the coupon rate, which is a percentage, always on a 1000 par

With this in mind, let's setup an Excel spreadsheet which you will upload when complete, and solve a couple of problems that are like #s 3 and 6. Let's just assume calculation on annual payments of interest rather than semi-annual, to simplify. Set them up the way you see in the guidelines- then solve!

You are given the following data: A bond has a coupon rate of 7.225, the latest yield reported of 6.23 and 8 years to maturity. What is the price of the bond?

Let's do another for good measure. A bond has a coupon rate of 6.95, the latest yield reported of 8.7 and 16 years to maturity. What is the price of this bond?

Now let's solve 2 for Yield to Maturity, as in the example for #4 from your Chapter 6 Valuing Bonds Guide. NOTE: You MUST carry these rates out to 4 decimal places for precision!!!

The years to maturity on Bond Beta are 12, the coupon rate is 4.5%, and the bond current sells for $1,032.04. What is the current YTM?

Bond Gamma will mature 18 years from now, pays a coupon rate of 8.25%, and currently is on the market for $998.14. What is the current YTM?

Finally, let's solve for the coupon rate, using the example setup for #5 for PMT from your Chapter 6 Valuing Bonds Guide spreadsheet. Remember to use your dollar results to interpret the percentage (to 4 decimal places - as your example shows!

A bond issued by Beverly Hillbilly Company currently sells for $1,040, has 15 years to maturity, and shows a current YTM of 5.76%. What is the coupon rate on the bond?

A bond for Gilligan's Famous Island Adventure, Inc., has a current market price of $974.32, matures in 5 years, and has a current YTM or 7.89%. What is the coupon rate on this bond?