You are caled in as a finsucisl snalyst to appraise the bonds of Olsen's Clothng Stores. The $$1,000$ par value bonds have a quoted

annual imerest rate of $12$ percent, which is paid sem'annually. The yeld to matuity on the bonds is $12$ percent annusil interest. There

are $10$ yesrs to maturity. Use Bopendix B and Acoendix D for an eppoximate answer but calculste your final answer using the formula

and financial calcuator methods.

Compure the price of the bonds based on semiannul andizls.

Note: Do not reund Intermedlate calculations. Round your final answer to $2$ decimal places.

Band price

b$.$ With $5$ yeses to maturity, if yield to maturity goes dawn substentisly to $6$ percent, what will be the new price of the bonds?

Note: Do not rownd Intermedilete celculations. Round your finsl answer to $2$ decimel pleces.

Thew bend price

Lance Whttingham IV specializes in buying deep discount bonds. These represent bonds that are trading ot well below par velue. He

has his eye on a bond issued by the Leisure Time Corporation. The $$1,000$ par value bond pays $5$ percent annual interest and has $14$

spproximste answer but calculate your final snswer using the formuls snd financial calculator methods.

a$.$ What is the current price of the bonds?

Nate; Do not round Intermed ete caleuletions. Round your final anawer to $2$ decimal pleces, Astume Intersst payments are

annuel,

Cument price of the bons

b$.$ By what percent will the price of the bonds incresse between now and maturity?

Note: Do net round lintermed ete caleulations. Input your answef as a percent rounded to $2$ deelmal places.

Perte$-$tage inerease in price of bund

$\%$

Katie Psiry Fruits Incorporated has a $$1,20013-$year bond outstanding with $5$ nominal yield of $17$ percent $($coupon equsls $17\%\backslash$times $$1,200-$

$$204$ per yean$).$ Assume that the current market required interest rate on similar bonds is now only $12$ percent. Use Apoendix $B$ and

Appendix $D$ for an appraximate answer but calculate your final answer using the formula and finsmcial calculator methods.

a$.$ Compute the current price of the bond.

Note: Do not reund Intermedlate caleulatlons. Round your flnal answer to $2$ decimal places. Astume Interest payments are

annual.

Currert price of the bond

b$.$ Find the present value of $5$ percent $$$$1,200($or $$60)$ for $13$ years at $12$ percent. The $$60$ is sssumed to be an annual payment. Add

this value to $$1\mathrm{.}200.$

Note: Do not round Intermedlate caleulations. Round your flnol onswer to $2$ declmal places. Assume interest payments are

ennual.

Present value