Question

# 1. Using present value pricing, find the price for a bong with a 4% coupon and...

1. Using present value pricing, find the price for a bong with a 4% coupon and a face value of \$100 and with a maturity of 3 years with an annual interest rate of 2%

2. Consider a bond with a maturity of 5 years. The bond has a coupon of 3% and a principal payment in the final year of \$100 and the bond is priced at \$90. Find the yield in percent.

3. Consider a bond with a maturity of 6 years. The bond has a coupon of 0% and a principal payment in the final year of \$200. Currently, the bond is priced at \$180. What is the yield to maturity of the bond in %?

1. Using present value pricing, find the price for a bong with a 4% coupon and a face value of \$100 and with a maturity of 3 years with an annual interest rate of 2% n = 3

r = 0.02

cpn = 100 * 0.04 = 4

FV = 100   2. FV = 100

N = 5

PMT = 100 * 0.03 = 3

PV = -90

CPT I/Y

I/Y =

Yield in Percent = 5.330916921%

3.

FV = PV * (1 + r)^n

(1 + r)^n = FV/PV

(1 + r) = (FV/PV)^(1/n)

1 + r = (FV/PV)^(1/n) - 1

r = (FV/PV)^(1/n) - 1

r = (200/180)^(1/6) - 1

r = 0.01771517069

Yield in percent = 1.771517069%

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