Question

Price the following:

12-year, $1000 par value, 6% semi-annual coupon bond whose current nominal yield-to-maturity (YTM) is 8%.

10-year, $1000 par value, 8% quarterly coupon bond whose current nominal YTM is 7%.

30-year, $1000 par value, zero-coupon bond whose current nominal YTM is 9.5%.

13-year, $1000 par value, 8% monthly coupon bond whose current nominal YTM is 10%.

5-year, $500 par value, 8% semi-annual coupon bond whose current nominal YTM is 8.25%

Answer 1

We can use PV() function to price these bonds

1,

2.

3.

future value = 1000

Time 30

Yield = 9.5%

Price = Face value / (1+yield)^time

Price = 1000 / (1.095)^30

Price =65.70

4.

5.

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