Problem ONE

1. A company issued 35-year bonds AT PAR with a 7.50% coupon paid annually.

After 6 years market interest rates remained unchanged

CY=______________ YTM=______________ CGY= ______________

2. What is the bond's current yield, capital gains yield & YTM USING THE TVM?

After another 3 years the bond's price is $874

CY=______________ YTM=______________ CGY= ______________

3. What is the bond's current yield, capital gains yield & YTM?

After another 7 years the bond's price is $1325

CY=______________ YTM=______________ CGY= ______________

4. What is the bond's current yield, capital gains yield & YTM?

After another 5 years the bond is priced with a YTM of 9 percent (YTM)

PRICE= ___________ CY= ____________ What is the bond's PRICE & current yield?

Use N, I, FV, PMT, PV for each of the 4 questions

N =

I =

FV =

PMT =

PV =