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Clifford Clark is a recent retiree who is interested in investing some of his savings in corporate bonds. His financial planner has suggested the following
Clifford Clark is a recent retiree who is interested in investing some of his savings in corporate bonds. His financial planner has suggested the following bonds:
Bond A has a annual coupon, matures in years, and has a $ face value.
Bond B has an annual coupon, matures in years, and has a $ face value.
Bond C has a annual coupon, matures in years, and has a $ face value.
Each bond has a yield to maturity of
The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Use a minus sign to enter negative values, if any. If an answer is zero, enter Price Bond C: $
decimal places.
Current yield Bond A:
Current yield Bond B:
Current yield Bond C:
d If the yield to maturity for each bond remains at what will be the price of each bond year from now? Round your answers to the nearest cent.
Price Bond A: $
Price Bond B: $
Price Bond C: $
What is the expected capital gains yield for each bond? What is the expected total return for each bond? Round your answers to two decimal places.
Bond A
Expected capital gains yield
Expected total return
Bond B
Bond C
years and has a price of $ It is also callable in years at a call price of $
What is the bond's nominal yield to maturity? Round your answer to two decimal places.
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