Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In your initial response you should answer the main question: If you are an investor who is looking for a corporate bond to invest to,

In your initial response you should answer the main question: If you are an investor who is looking for a corporate bond to invest to, are you going to buy a bond that you chose(chose a company)? To answer this question you should complete three steps:

1). Copy the bond's quotation from the website.

2). Describe the main elements of the bond:

  • Coupon rate
  • Calculate annual coupon payment (assuming face value $1,000)
  • What is the frequency of coupon payments of the bond? If the frequency is greater than 1, how much is payment is going to be?
  • Maturity,
  • Rating. Explain the meaning of rating.
  • The last price listed in quotation
  • How much the investor would pay for the bond assuming $1,000 face value and using the last price listed in quotation?
  • Calculate the current yield of the bond assuming that par value of the bond is $1,000
  • How much is the YTM listed in quotations is for the bond? Explain the meaning of YTM.
  • Is the bond callable or not? If the bond that you chose is callable (non-callable), will it change your decision to buy it?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Authors: E. Thomas Garman, Raymond E. Forgue, Jonathan Fox

14th Edition

ISBN: 0357901495, 9780357901496

More Books

Students also viewed these Finance questions

Question

1. Identify three approaches to culture.

Answered: 1 week ago

Question

2. Define communication.

Answered: 1 week ago