Question
Jason Greg is a recent retiree who is interested in investing some of his savings in corporate bonds. Listed below are the bonds he is
Jason Greg is a recent retiree who is interested in investing some of his savings in corporate bonds. Listed below are the bonds he is considering adding to his portfolio.
Bond A has a 7.5% semiannual coupon, matures in 12 years, has a $1000 face value. Bond B has a 10% semiannual coupon, mature in 12yrs, has a $1000 face value. Bond Chas an 11.5% semi annual coupon, mature in 12 yrs, has a $1000 face value.
Each bond has a YTM of 10%.
1.Before calculating the price of the bonds, indicate if each bond is trading at premium or discount par.
2.Calulate price of these bonds.
3.Calculate the current yield for each bonds.
4.Greg is considering another bond, Bond D. Has an 8% semi annual coupon and $1000 face value. Bond D scheduled to mature in 9 yrs and gas price of $1150. It is callable in 5 yes at call price $1040. What is the bond YTM? What is bond YTC? If Mr Greg were to purchase this bond, would he be more likely to receive the YTM or YTC? Explain why.
i have a COMMENT: I checked some of the previous problems you all did and came up with different answers. Am I paying for wrong answers. Some of my answers I did were correct. I do need help and guidance, because I have to sometimes work 9-10 hours a day, and have limit time.
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