Question
What is the YTM on a 25 year, 6% semiannual coupon bond with a par value of $1000 that may be called in 7 years
What is the YTM on a 25 year, 6% semiannual coupon bond with a par value of $1000 that may be called in 7 years at a call price of $1080. The bond sells for $1150.
What is the annualized yield from #2?
What is bonds yield to call and annualized YTC (use info from #2)?
What is the bonds current yield (use info from #2)?
What is bonds capital gain or loss yield (use #2 and 4 for info)?
Find the PV of an annual bond if you have 30 years, a YTM of 10% and a coupon rate of 11%.
Use the same figures in #7, but now find PV if the coupon rate drops to 9%.
Calculate your quoted market interest rate if your inflation premium is 3%, default risk premium is 2%, maturity risk premium is 3%, liquidity premium is zero, and your real risk free rate of interest is 1%.
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