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Show your work on the answer pages. For the equations shown, insert the values used. Show yields out to 4 decimal places (XX.XXXX%). Calculate solutions
Show your work on the answer pages. For the equations shown, insert the values used. Show yields out to 4 decimal places (XX.XXXX%). Calculate solutions for problems 1 and 2 (Bonds A and B) assuming annual coupons and again assuming semiannual coupons. Assume pricing on coupon dates and $100 PAR value. 1. Bond A: 5.5s of 2034 (coupon and maturity) selling @ 109 3/8 (price); maturity 15 years a. Find the current yield b. Find the yield to maturity (for the semiannual bond, annualize the YTM using the bond equivalent yield and the effective interest rate methods) 2. Bond B: 5.5s of 2049 selling @ 109 3/8; maturity 30 years a. Find the current yield b. Find the yield to maturity (for the semiannual bond, annualize the YTM using the bond equivalent yield and the effective interest rate methods) Problem 1: Bond A Annual Compounding Current Yield Equation Yield Yield to Maturity Equation with values inserted YTM Effective Semiannual Compounding Current Yield Equation Yield Yield to Maturity Equation with values inserted YTM Effective Problem 2: Bond B Annual Compounding Current Yield Equation Yield Yield to Maturity Equation with values inserted YTM Effective Semiannual Compounding Current Yield Equation Yield Yield to Maturity Equation with values inserted YTM Effective
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