GHA Chapter 7 Name: Date: 1. Suppose you buy a 7 coupon, 20-year bond today when it's first issued. If interest rates suddenly rise to 15%, what happens to the value of your bond? Why? 2. Suppose a company issues a bond with a par value of $1,000, 23 years to maturity, and a coupon rate of 5.8% paid annually. If the yield to maturity is 4.7%, what is the current price of the bond? 3. Seekers Inc. issued 15-year bonds a year ago at a coupon rate of 4.1%. The bonds make semiannual payments and have a par value of $1,000. If the YTM is 4.5%, what is the current bond price? Yan Yan Corp. has a $2,000 par value bond outstanding with a coupon rate of 4.9% paid semiannually and 13 years to maturity. The yield to maturity is 3.8% What is the price of the bond? - Arla 11 BIVAD = = = = 1 2 3 4 5 6 2. Suppose a company issues a bond with a par value of $1,000, 23 years to maturity, and a coupon rate of 5.8% paid annually. If the yield to maturity is 4.7%, what is the current price of the bond? 3. Seekers Inc. issued 15-year bonds a year ago at a coupon rate of 4.1%. The bonds make semiannual payments and have a par value of $1,000. If the YTM is 4.5%, what is the current bond price? GHA Chapter 7 Name: Date: 1. Suppose you buy a 7 coupon, 20-year bond today when it's first issued. If interest rates suddenly rise to 15%, what happens to the value of your bond? Why? 2. Suppose a company issues a bond with a par value of $1,000, 23 years to maturity, and a coupon rate of 5.8% paid annually. If the yield to maturity is 4.7%, what is the current price of the bond? 3. Seekers Inc. issued 15-year bonds a year ago at a coupon rate of 4.1%. The bonds make semiannual payments and have a par value of $1,000. If the YTM is 4.5%, what is the current bond price? Yan Yan Corp. has a $2,000 par value bond outstanding with a coupon rate of 4.9% paid semiannually and 13 years to maturity. The yield to maturity is 3.8% What is the price of the bond? - Arla 11 BIVAD = = = = 1 2 3 4 5 6 2. Suppose a company issues a bond with a par value of $1,000, 23 years to maturity, and a coupon rate of 5.8% paid annually. If the yield to maturity is 4.7%, what is the current price of the bond? 3. Seekers Inc. issued 15-year bonds a year ago at a coupon rate of 4.1%. The bonds make semiannual payments and have a par value of $1,000. If the YTM is 4.5%, what is the current bond price