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Lab 4: Bond Valuation Exercise 1 iztucel semiannuslly, will malues in 15 yesars, and have a wupen rade or 6% en a lake salus of
Lab 4: Bond Valuation Exercise 1 iztucel semiannuslly, will malues in 15 yesars, and have a wupen rade or 6% en a lake salus of $1,0Na. Currecty, the honds are sel the foe $9211. . If yau required reaun is tisho for honds in this risk class, what is the highest price you woald be willing ra pay? b. What is the curnt yide al these bucals? c. What is the yiclu ka maturity on tese bocis il you purtase than a the eucred price? d. If you low the boedz for cate sear, and inseres rates do rot deange, what bal mate of return aill you eam, assuming that you pay the markat price? Why is this different from the YTh? e. If the bonds ean be ealled in thee yesns with x call premam of 4 as af the beee valae, wha is the yied to call? t. Now sesume that the setilatioat date liv sour parchse is 7/302020, the marity dae is g. If raaket interest mater nemaan unchanged, do you think it is likely that the bond will be callod in hee years? Why er why nul? 1. Cteak a chart ita showa the telationstip of the bond's price to your fequired reurn. Usea range of inh to 1.5% in calculating the grices
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