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Corporate bond question, please help. Any help is appreciated and will give thumbs up! Thank you! Practical Application: Consider the following corporate and muni bond
Corporate bond question, please help. Any help is appreciated and will give thumbs up! Thank you!
Practical Application: Consider the following corporate and muni bond info from Thursday 2/11/2021 (Settlement is T+2 i.e. 2/15/2021). All the bonds are semiannual. EXERCISE #4: If Western Union 2040 gets downgraded to BB+ and the yield changes by 1%, then for Western Union 2040: New ytm= %, New approx. Price = [Assume exactly 191/2 years to maturity.] EXERCISE #5: Compute the taxable-equivalent yield to maturity on the UtahStBIdg 2038 bond for a Utah resident paying a 25% federal and a 7% state income tax (add). Tax-eq yield =.. EXERCISE #6: Compute the approx yield to call on the Salt Lake Arpt 2047. Assume 61/2 years to call. YTC= .\% EXERCISE #7: Compute the Mod Duration of the EastmanChem 2044 bond by "blipping". [231/2 years to maturity] That is, compute three prices: at the current ytm, and by changing the ytm by 0.05% up and down. Then follow the ModD definition. Rescale correctly. ModD=%/y=(P+5P5)/P/(y+5y5) Practical Application: Consider the following corporate and muni bond info from Thursday 2/11/2021 (Settlement is T+2 i.e. 2/15/2021). All the bonds are semiannual. EXERCISE #4: If Western Union 2040 gets downgraded to BB+ and the yield changes by 1%, then for Western Union 2040: New ytm= %, New approx. Price = [Assume exactly 191/2 years to maturity.] EXERCISE #5: Compute the taxable-equivalent yield to maturity on the UtahStBIdg 2038 bond for a Utah resident paying a 25% federal and a 7% state income tax (add). Tax-eq yield =.. EXERCISE #6: Compute the approx yield to call on the Salt Lake Arpt 2047. Assume 61/2 years to call. YTC= .\% EXERCISE #7: Compute the Mod Duration of the EastmanChem 2044 bond by "blipping". [231/2 years to maturity] That is, compute three prices: at the current ytm, and by changing the ytm by 0.05% up and down. Then follow the ModD definition. Rescale correctly. ModD=%/y=(P+5P5)/P/(y+5y5)Step by Step Solution
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