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I really need help I know it is a lot of work, but I will give a good rating and feedback to whoever helps. Years
I really need help I know it is a lot of work, but I will give a good rating and feedback to whoever helps.
Years to maturity Number of coupon payment per year Coupon rate Par value Yield to maturity Bond A 12 1 8% $1,000 7% Bond B 12 1 7% $1,000 7% Bond C 12 1 6% $1,000 7% b. Calculating the price of each of the three bonds Bond A VBO Bond B Bond C c. Calculating the current yield for each of the three bonds Bond A Bond B Current yield Bond C d. Calculating the price of each bond 1 year from now, the expected capital gains yield for each bond, and the expected total return for each bond Bond A Bond B Bond C Years to maturity 11 11 11 V81 Expected CG Yield Expected Total Return e. Mr. Clark is considering another bond, Bond D. Years to maturity 8 Number of coupon payment per year 2 Coupon rate 9% Par value $1,000 Coupon payment $45 Current price $1,110 $1,020 Years until bond is callable 5 Call price (1) Calculating the bond's nominal yield to maturity (2) Calculating the bond's nominal yield to call Formulas #N/A #N/A Bond 5 10 f. Determining which of the bonds has the most price risk and which has the most reinvestment risk Bond 1 Bond 2 Bond 3 Bond 4 Years to maturity 1 5 5 10 Number of coupon payment per year 1 1 1 Coupon rate 7% 7% 7% Par value $1,000 $1,000 $1,000 $1,000 $1,000 Price at YTM = Price at YTM = % Price Change 7% 8% g. Calculating the price of each bond (A, B, and C) at the end of each year until maturity, assuming interest rates remain constant Years Remaining Until Maturity Bond A Bond B Bond C 12 11 10 9 8 7 6 5 NO LO MNO 4 3 2 1 0 Bond C (1) Calculating the expected current yield for each bond in each year Years Remaining Until Maturity Bond A Bond B 12 11 10 9 8 7 6 5 4 3 2 1 (2) Calculating the expected capital gains yield for each bond in each year Years Remaining Until Maturity Bond A Bond B Bond C 12 11 10 9 8 7 6 5 4 3 2 1 Bond B Bond C (3) Calculating the total return for each bond in each year Years Remaining Until Maturity Bond A 12 11 10 9 8 7 6 5 O ooON COLOM 3 2 1
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