just need help with questions 6-9 please
E 3050 Module 9 Lecture SX FNCE 3050 HW9 Questions X ${u-d2466a55b25d68aece37d9d924776ace098495ee/MyFiles/Downloads/FNCE%203050%20HW9%20questions.pdf 6 7 Section Two: Intermediate 17 points each) You own $1 mil Par Amount of the UST 3% 30yr bond. What is the dollar value of this holding? If UST yields fall 25 bps... What is the new dollar value of the S1 mil Par Amount of UST 3X 30yr bond? You own $1 mil Notional Amount of Amazon (888 Rated) AMZN 3% 7yr. What is the dollar value of this holding? If BBB credit spreads rise by 15 bps... What is the new dollar value of the $1 mil par Amount of AMZN 3% 7yr bond? You buy a municipal bond with a tax-free YTM of 2.50%. If your effective tax rate is 35%, what is the taxable equivalent YTM on this municipal bond (i.e. what taxable yield would give you the same after-tax economies)? 8 9 10 Section Three: Harder (3 points each) 11 Three years ago, in 2016, you bought $100,000 Face Value of Boeing Aerospace (A Rated) 3% 10yr bonds at a YTM of 3.25%. What was the amount of your initial investment amount (e. what is their value, that's what you pay? Three years pass, it's now 2019 (today), and the market is as outlined in Market Data What is the value of your BA holdings today? 12 News is released: Boeing 737 Max aircraft has serious safety flaws. Credited Binadanas OREC hp FNCE 3050 HW9 Questions Module 9 Lecture SX 2466a55b25d68aece37d9d924776ace098495ee/MyFiles/Downloads/FNCE%203050%20HW9%20Questions.pdf Appendix: Market Data UST Yield Curve 1.000 5yr AAA AA Credit Spreads In Bps, for Rating & Maturity 7yr 10yr 30yr 5 10 15 20 25 15 20 25 30 35 35 40 45 50 55 65 70 75 80 85 2.800 A BBB 2400 2200 Credit Spreads are quoted in bps Remember: a bps is 1/100 of 196 For example, 25 bps = 0.2596 3.000 1 4 5 G 9 10 30 TM 2.250 2.410 250 260 270 280 2910 2.950 2970 2.970 2070 (hp E 3050 Module 9 Lecture SX FNCE 3050 HW9 Questions X ${u-d2466a55b25d68aece37d9d924776ace098495ee/MyFiles/Downloads/FNCE%203050%20HW9%20questions.pdf 6 7 Section Two: Intermediate 17 points each) You own $1 mil Par Amount of the UST 3% 30yr bond. What is the dollar value of this holding? If UST yields fall 25 bps... What is the new dollar value of the S1 mil Par Amount of UST 3X 30yr bond? You own $1 mil Notional Amount of Amazon (888 Rated) AMZN 3% 7yr. What is the dollar value of this holding? If BBB credit spreads rise by 15 bps... What is the new dollar value of the $1 mil par Amount of AMZN 3% 7yr bond? You buy a municipal bond with a tax-free YTM of 2.50%. If your effective tax rate is 35%, what is the taxable equivalent YTM on this municipal bond (i.e. what taxable yield would give you the same after-tax economies)? 8 9 10 Section Three: Harder (3 points each) 11 Three years ago, in 2016, you bought $100,000 Face Value of Boeing Aerospace (A Rated) 3% 10yr bonds at a YTM of 3.25%. What was the amount of your initial investment amount (e. what is their value, that's what you pay? Three years pass, it's now 2019 (today), and the market is as outlined in Market Data What is the value of your BA holdings today? 12 News is released: Boeing 737 Max aircraft has serious safety flaws. Credited Binadanas OREC hp FNCE 3050 HW9 Questions Module 9 Lecture SX 2466a55b25d68aece37d9d924776ace098495ee/MyFiles/Downloads/FNCE%203050%20HW9%20Questions.pdf Appendix: Market Data UST Yield Curve 1.000 5yr AAA AA Credit Spreads In Bps, for Rating & Maturity 7yr 10yr 30yr 5 10 15 20 25 15 20 25 30 35 35 40 45 50 55 65 70 75 80 85 2.800 A BBB 2400 2200 Credit Spreads are quoted in bps Remember: a bps is 1/100 of 196 For example, 25 bps = 0.2596 3.000 1 4 5 G 9 10 30 TM 2.250 2.410 250 260 270 280 2910 2.950 2970 2.970 2070 (hp
