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Please help with 26-28. Thank you 26 Five years ago, you bought $25 mil Face Value of Caterpillar (BBB Rated) 4% 10yr bonds at a
Please help with 26-28. Thank you
26 Five years ago, you bought $25 mil Face Value of Caterpillar (BBB Rated) 4% 10yr bonds at a YTM of 4.380%. What was the amount of your initial investment amount (.e. what was their value when you bought them) (in millions, to two decimal places)? 27 Five years ago, you bought $25 mil Face Value of Caterpillar (BBB Rated) 4% 10yr bonds at a YTM of 4.375%. What are your holdings worth today, using current market conditions in the Appendix (in millions, to two decimal places)? 28 If today you could sell the Caterpillar Bonds at a price of 104.000, what would be the YTM (to two decimal places)? Appendix: Market Data UST Yield Curve 3.500% 3.000% Credit Spreads In Bps, for Rating & Maturity 3yr Fyr Fyr 10yr 5 10 15 15 20 25 30 35 40 45 50 65 70 75 80 20 AAA AA A BBB 2.500% 30yr 25 35 55 85 2.000% 1.500% 1.000% 0.500% Credit Spreads are quoted in bps Remember: a bps is 1/100th of 1% For example, 25 bps = 0.25% 0.000% 1 2 3 4 5 6 7 8 9 10 30 YTM 2.500% 2.660% 2.800% 2.920% 3.020% 3.100% 3.160% 3.200% 3.220% 3.220% 3.220% Maturity (Years)Step by Step Solution
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