Question
You have two coupon bonds: Bond A is a $1000 face value 30 year zero coupon (semi-annual) bond with a yield to maturity of 5%.
You have two coupon bonds: Bond A is a $1000 face value 30 year zero coupon (semi-annual) bond with a yield to maturity of 5%. Bond B is a $1000 face value 30 year 10% coupon bond, paying coupons semiannually, with a yield to maturity of 5%. If interest rates fall by 2%, what will be the price impact on each of the bonds?
Current 10 year Treasuries yield 2.33%. AAA Bonds yield 3.63% BBB bonds yield 4.33%. If you plan to issue a $100 par value 10 year 4% coupon bond that pays semiannual coupons, and comparable bonds are BBB rated, at what price will the bonds be issued?
A company currently has $1000 par value 30 year 6% semiannual coupon bonds that sell for 107.5% of par (107.5% of par means the current price = 107.5% x 1000 = 1075). If the company wants to issue new bonds today at par, what coupon rate must it issue the bonds at?
Based on the following Treasury yield curve, A) price $100 par value zero coupon bond maturing in 5 years; B) price the value of a risk free annuity of $1000 per year for the next 3 years, with the first cash flow starting in one year.
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