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Please give out the correct formula and do it in detail (don't use TI BA II Plus calculator directly), thank you 1. Bond prices, yield
Please give out the correct formula and do it in detail (don't use TI BA II Plus calculator directly), thank you
1. Bond prices, yield to maturity, and returns (20 points) Walk through details of bond YTM, price: You are considering a Treasury note that matures in 7 years, has a coupon of 2.5%, makes semiannual coupon payments, and has face value of 1000. a. What are the bond's cash flows? b. If the bond's yield today (2021) is equal to 1.50% what would the price be? c. Next year Market conditions, end of 2022 (one year since purchase at end of 2021), change and the bond price (quoted as a percentage of par) is now equal to 100.99. What is the new yield to maturity? d. Given the change in price and yields What is the return on your investment over the past year (assuming that you bought at the price in b.)? and price goes up or down depending YTM. HOW would annual return Change IF you put down only 20% equity and borrowed the rest at 2%. (Calculate Return on equity- borrowing costs)
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