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Problem 3 You are given the following data for a set of bonds with different maturity dates in the table below. Also assume the current
Problem 3 You are given the following data for a set of bonds with different maturity dates in the table below. Also assume the current interest rate (YTM) is 5% and the Face Value of each bond is $1000. Current Yield Years to Maturity Current Price Pt Rate of Return R Rate of Capital Gain g Next Year's Price Pt+1 30 20 10 5 2 1 5% 5% 5% 5% 5% 5% $1000 $1000 $1000 $1000 $1000 $1000 a. Determine the coupon payment on each bond. b. Now assume the interest rate (YTM) increases to 10%. Determine the Price of the bond next period for each bond (UPDATE N ONE YEAR). Determine the Rate of Capital Gain or Loss for each bond. Determine the Rate of Return for each bond. (FILL IN THE TABLE). Show your work for the 30-year bond and 20-year bond for the last 3 columns
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