What is the current value of a 30-year bond with a 4% coupon rate if the current market interest rate is 5.00%?

A zero coupon bond is sold at a discount and pays no cash interest during its lifetime. At maturity it pays the face value of the bond.What is the current value of a 10-year zero coupon bond if the current market interest rate is 4.00%? monkey2

What is the current value of a 20-year bond with a coupon rate of 6% (annual) with semi-annual coupon payments if the current market interest rate is 3.0% (annual)? [The coupon frequency is explicitly stated here because we want to compare this PV(bond) to the next question. Everything else being equal, the frequency of coupons DO affect the price of the bond.]

What is the current value of a 15-year bond with a coupon rate of 5% with quarterly couponpayments if the current market interest rate is 6.0%?

What is the Yield to Maturity (YTM) and the Yield to Call (YTC) for a bond which is currently priced at $975 if the bond has a coupon of 6%, matures in 10 years but could be called at a price of $1,025 in 5 years?

Spring2

In each of the blue cells below, calculate the value of the respective bonds with various combinations of market interest rate, coupon rate, and maturity assumptions:

[assume annual coupons; $1,000 face value]

[you can leave the following bond prices as positive numbers; easier to calculate % change]

What do you conclude about the relative sensitivity of bond prices to changes in interest rate?

[Hint: use the above calculated numbers to make comments on the following comparisons with regard to how sensitive are bond price changes when its market interest rate changes]

1)Longer maturities relative to shorter maturities?

Put your response here ....

2)Higher coupon bonds relative to lower coupon bonds?

Put your response here ....