PART 2 - FINANCE

a) What is the price of a 1,000 par value, 4-year annual bond with a 9.62% coupon rate and a yield to maturity of 5.79%?

b) You bought a 11-year, 6.69% semi-annual coupon bond today and the current market rate of return is 5.69%. The bond is callable in 5 years with a $86.00 call premium. What price did you pay for your bond?

c) A 6.56% coupon, 23-year annual bond has a yield to maturity of 8.17%. Assuming the par value is 1000 and the YTM does not change over the next year, compute the price of the bond today, price of the bond in 1 year, capital gains yield and current yield.