Need help with problem 2 section (v), (vi) and problem 3 and 4. Please include formula to better understand problem. Thank you!!!
I. The yield to maturity on a 30 year 6.75% annual coupon bond is 10.5% per year. Work out the price of the bond assuming that its face value is $100 (i). (ii). Work out W3o, the value of your investment at t-30 assuming that the yield to maturity is an accurate measure of return, and therefore your investment grows at the yield to maturity of 10.5% per year (ii). Work out the profit you made over the 30 years that you held the bond. Work out the dollar amount of capital gains, and the percentage of the profit that (iv). (v). (vi). they represent. Work out the dollar amount of coupons, and the percentage of the profit that they represent. Work out the dollar amount of reinvestment income, and the percentage of the profit that it represents. The yield to maturity on a 3 year 6.75% annual coupon bond is 10.5% per year. Work out the price of the bond assuming that its face value is $100 maturity is an accurate measure of return, and therefore your investment grows at 2. (i). (ii). Work out Ws, the value of your investment at t-3 assuming that the yield to the yield to maturity of 10.5% per year. (iii). Work out the profit you made over the 3 years that you held the bond. (iv). Work out the dollar amount of capital gains, and the percentage of the profit that (v). Work out the dollar amount of coupons, and the percentage of the profit that they (vi). Work out the dollar amount of reinvestment income, and the percentage of the they represent. represent. profit that it represents. Price a 5-year 1.625% annual coupon bond with a face value of $100 on the basis 3. of daily treasury yield curve data for relevant rates as of July 9, 2018 available on http://www.treasury.gov/resource-center/d Now assume the term structure at t-1. Work out P1, the price of the bond at t 1, and hi, the one-y holding period return. Was this bond a good investment? Explain. hart-center/interest-rates/pages/textview aspx?data-yield. that you forecast that an upward parallel shift of 15 basis points will occur The price a risk free 9-year zero coupon bond is 71.1% of its face value. Work out ro, the spot risk free rate of return on investments with a term to maturity of 9 years