Question

A 7% semiannual coupon bond matures in 5 years. The bond has a
face value of $1,000 and a current yield of 7.4352%.

a. What is the bond's price? Do not round intermediate
calculations. Round your answer to the nearest cent.

b. What is the bond's YTM? Do not round intermediate calculations. Round your answers to two decimal places.

Answer #1

Information provided:

Face value= Future Value = $1,000

Coupon rate= 7%/2= 3.5%

Coupon payment= 0.035*$1,000= $35

Time period= 5 years*2= 10 semi-annual periods

a.Current Yield is calculated using the below formula:

Current Yield= Annual interest/ Current price

0.074352= $35*2/ Current price

Current price= $70/ 0.074352

=
**$941.47.**

b.The yield to maturity is calculated by entering the below in a financial calculator:

FV= 1,000

PV= -941.47

N= 10

PMT= 35

Press the CPT key and I/Y to compute the yield to maturity.

The value obtained is 4.2299.

Therefore, the yield to maturity is
4.2299%*2= 8.4598% **8.46%.**

An 8% semiannual coupon bond matures in 5 years. The bond has a
face value of $1,000 and a current yield of 8.3765%.
What is the bond's price? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 7 for the
definition of the current yield and to Table 7.1.) Do not round
intermediate calculations. Round your answers to two decimal
places.
%

A 7% semiannual coupon bond matures in 4 years. The bond has a
face value of $1,000 and a current yield of 7.5452%.
What is the bond's price? Do not round intermediate
calculations. Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 7 for the
definition of the current yield and to Table 7.1.) Do not round
intermediate calculations. Round your answers to two decimal
places.

A 7% semiannual coupon bond matures in 4 years. The bond has a
face value of $1,000 and a current yield of 7.5146%.
What is the bond's price? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 6 for the
definition of the current yield and to Table 7.1) Do not round
intermediate calculations. Round your answers to two decimal
places.
%

A 7% semiannual coupon bond matures in 6 years. The bond has a
face value of $1,000 and a current yield of 7.7535%.
What is the bond's price? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 6 for the
definition of the current yield and to Table 7.1) Do not round
intermediate calculations. Round your answers to two decimal
places.
%

An 8% semiannual coupon bond matures in 6 years. The bond has a
face value of $1,000 and a current yield of 8.3356%.
What is the bond's price? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 6 for the
definition of the current yield and to Table 7.1) Do not round
intermediate calculations. Round your answers to two decimal
places.

An 8% semiannual coupon bond matures in 6 years. The bond has a
face value of $1,000 and a current yield of 8.1436%.
What is the bond's price? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 6 for the
definition of the current yield and to Table 7.1) Do not round
intermediate calculations. Round your answers to two decimal
places.
%

An 8% semiannual coupon bond matures in 6 years. The bond has a
face value of $1,000 and a current yield of 8.3977%. What are the
bond's price and YTM? (Hint: Refer to Footnote 6 for the definition
of the current yield and to Table 7.1) Do not round intermediate
calculations. Round your answer for the bond's price to the
nearest cent and for YTM to two decimal places.
Bond’s price: $ =
YTM: =

An 8% semiannual coupon bond matures in 4 years. The bond has a
face value of $1,000 and a current yield of 8.1793%.
A. What is the bond's price? Do not round intermediate
calculations. Round your answer to the nearest cent.
B. What is the bond's YTM?

PRICE AND YIELD
An 8% semiannual coupon bond matures in 6 years. The bond has a
face value of $1,000 and a current yield of 8.4446%.
What is the bond's price? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 7 for the
definition of the current yield and to Table 7.1.) Do not round
intermediate calculations. Round your answers to two decimal
places.

An 8% semiannual coupon bond matures in 5 years. The bond has
a face value of $1,000 and a current yield of 8.2761%.
What is the bond's price? Do not round intermediate
calculations. Round your answer to the nearest cent.
$

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 14 minutes ago

asked 17 minutes ago

asked 26 minutes ago

asked 27 minutes ago

asked 1 year ago

asked 35 minutes ago

asked 43 minutes ago

asked 43 minutes ago

asked 59 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago