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I need help with answering questions e though I please. Step by step. in each case in the preceding quesHoh? f. Suppose that the bond

I need help with answering questions e though I please. Step by step.
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in each case in the preceding quesHoh? f. Suppose that the bond described in part (e) is callable i five years at a cal price equal to $1,090. What is the YTC on the bond if its n $8872 What is the YTC on the same bond if its current mark $1,134.20? e bond if its current market D g. What is interest rate price risk? Which bond in part h. What is interest reinvestment rate risk? Which bond in part (c) has more interes rate price risk, the one-year bond or the 10-year bond? c) has mate interest rate reinvestment rate risk, assuming a 10-year investment hotie Redo parts (c) and (d), assuming that the bonds have semiannual rathcr than annual coupons. Suppose you could buy, for $1,000, either a 10 percent, 10-year, annual payment bond or a 10 percent, 10-year, semiannual payment bond. Bot j. bonds are equally risky. Which would you prefer? If $1,000 is the prope price for the semiannual bond, what is the proper price for the annual pp ment bond? k. What is the value of a perpetual bond with an annual coupon of $100 ifs required rate of return is 10 percent? 13 percent? 7 percent? Assess th f lowing statement: "Because perpetual bonds match an infinite investmeti horizon, they have little interest rate price risk." 10-43 A major new client has requested that Mutual of Chicago present an invesu seminar to illustrate the stock valuation nrocess As a rrs t. Campbella WlOSe value is based on How do you determine the value of a bond? What is the value of a one-year, $1,000 par value bond with a 10 percent annual coupon if its required rate of return is 10 percent? What is the value of a similar 10-year bond? 1) What would be the value of the 10-year bond described in part (c) 11, . C. d. just after it had been issued, the expected inflation rate rose by 3 per- centage points, causing investors to require a 13 percent retu security now a discount bond or a premium bond? What would happen to the bond's value if inflation fell and ra declined to 7 percent? Would it now be a premium bond or a dis- count bond? What would happen to the value of the 10-year bond over time if the required rate of return remained at (i) 13 percent or (ii) remained at 7 percent? rn is the (2) (3) $1,000 par value bond that sells for $887.00? That sells for $1,134.20? What does the fact that a bond sells at a discount or at a premium tell you about the relationship between rd and the bond's coupon rate? e. (1) What is the yield to maturity on a 10-year, 9 percent annual coupon

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