Question

1.) For bank of different types below, list all agencies that can regulate it:

1. A national bank;
2. Non-Fed member state bank, insured by FDIC
3. Bank holding company
4. Fed member state bank;

2.) This year, the price of a $1000-face-value coupon bond (10% coupon rate) is $1092.97. The bond has 2 years to maturity. What is the yield to maturity (interest rate)? If the bond price is expected to be $1100 next year, calculate the return of bond this year.

Answer 1

1)

BANKS	REGULATOR
National Bank	Office of the Comptroller of the Currency
Non-Fed member state bank, insured by FDIC	Federal Deposit Insurance Corporation
Bank holding company	The Federal Reserve
Fed member state bank	Office of the Comptroller of the Currency

2)

Price	1092.97
Face Value	1000
Coupon Rate	10%
Coupon amount	100
Tenure	2
Yeild to Maturity	5.00%

if bond price is expected $1100 next year ,

return of bond this year = $ 1138.67

(Note: Rate and PV function is used )