Question

Johnson and Johnson (JNJ), rated AAA by S&P, issues an 8-year $1000 par value bond that

pays semi-annual coupons. Coupon rate is 3.2%. The bond is priced at $1096.59.

At the same time Valero Corporation (rated BBB by S&P) issues a similar bond with same

maturity, par value, and coupon rate and frequency. The BBB-AAA spread is 90 basis points.

Find the bond price of Valero Corporation.

[Hint: First find the semi-annual yield of the JNJ bond. Then annualize the yield. Using the

spread, find out the annualized yield of Valero bond. From which you can calculate the semi-

annual yield of the Valero bond. Now, find the price of the Valero bond

Answer #1

A
BBB-rated corporate bond has a yield to maturity of 6.1% a US
treasury security has yield to maturity of 4.8%.these yield are
quoted as APRs with semiannual compounding.both bonds pay
semi-annual coupons at a rate of 7.5% and have five years to
maturity
a.what is the price (expressed as a percentage of the face
value) of the treasury bond ?
b.what is the price (expressed as a percenatge of the face
value ) of the BBB-rated corporate bond?
c.what...

A BBB-rated corporate bond has a yield to maturity of 10.6 %. A
U.S. treasury security has a yield to maturity of 9.3 %. These
yields are quoted as APRs with semiannual compounding. Both bonds
pay semi-annual coupons at a rate of 9.8 % and have five years to
maturity.
a. What is the price (expressed as a percentage of the face
value) of the treasury bond?
b. What is the price (expressed as a percentage of the face
value)...

A BBB-rated corporate bond has a yield to maturity of 6.6 %. A
U.S. treasury security has a yield to maturity of 5.1 %. These
yields are quoted as APRs with semiannual compounding. Both bonds
pay semi-annual coupons at a rate of 6.1 % and have five years to
maturity.
a. What is the price (expressed as a percentage of the face
value) of the treasury bond?
b. What is the price (expressed as a percentage of the face
value)...

A BBB-rated corporate bond has a yield to maturity of 9.4%.A
U.S. treasury security has a yield to maturity of
7.5%. These yields are quoted as
APRs with semiannual compounding. Both bonds pay semi-annual
coupons at a rate of 8.2% and have five years to maturity.
a. What is the price (expressed as a percentage of the face
value) of the treasury bond?
b. What is the price (expressed as a percentage of the face
value) of the BBB-rated corporate...

A BBB-rated corporate bond has a yield to maturity of 10.5%. A
U.S. treasury security has a yield to maturity of 9.2%. These
yields are quoted as APRs with semiannual compounding. Both bonds
pay semi-annual coupons at a rate of 9.4% and have five years to
maturity.
A) What is the price (expressed as a percentage of the face
value) of the treasury bond?
B) What is the price (expressed as a percentage of the face
value) of the BBB-rated...

A BBB-rated corporate bond has a yield to maturity of 12.2 %. A
U.S. treasury security has a yield to maturity of 10.5 %. These
yields are quoted as APRs with semiannual compounding. Both bonds
pay semi-annual coupons at a rate of 11.0 % and have five years to
maturity. a. What is the price (expressed as a percentage of
the face value) of the treasury bond? b. What is the price
(expressed as a percentage of the face value)...

A BBB-rated corporate bond has a yield to maturity of 11.4 %. A
U.S. treasury security has a yield to maturity of 10.0 %. These
yields are quoted as APRs with semiannual compounding. Both bonds
pay semi-annual coupons at a rate of 10.5 % and have five years to
maturity. (I need help with all 3 parts thank you.)
a. What is the price (expressed as a percentage of the
facevalue) of the treasury bond?
b. What is the price...

a) Consider the following, a AAA rated Treasury bond with a face
value of $1000, maturing in 20 years and paying 14.00 per cent per
annum coupons semi-annually. If current market yields for this type
of security are 12.00 per cent per annum, what price would you pay
for the instrument?
b) What will happen to the price of the bond if yields adjust
from
12.00 to 10.00 percent per annum?
c) Consider now the bonds noted above in (a)...

A BBB-rated corporate bond has a yield to maturity of 11.6 %. A
U.S. Treasury security has a yield to maturity of 9.8 %. These
yields are quoted as APRs with semiannual compounding. Both bonds
pay semiannual coupons at an annual rate of 9.9 % and have five
years to maturity.
a. What is the price (expressed as a percentage of the face
value) of the Treasury bond?
b. What is the price (expressed as a percentage of the face...

****PLEASE SHOW IN EXCEL***
4.
Johnson Jay Inc. issues a 9 percent coupon bond with 24 years
maturity, $1,000 face (par) value, and semi-annual coupon payments.
If the current market price of this bond is $751, find its yield to
maturity.
A. 12.23%
B. 8.34%
C. 12.95%
D. 7.98%
E. none of the answers is correct

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