Question

A portfolio has 3 bonds with semiannual payments of interest. Bond 1 Bond 2 Bond 3...

A portfolio has 3 bonds with semiannual payments of interest.

Bond 1

Bond 2

Bond 3

Face Value

15000

24000

10000

Coupon

15%

12%

16%

Maturity (Yrs)

3

5

6

Yield

12%

8%

10%


Calculate the yield for this portfolio. (Assume that interest is paid on the same dates for the 3 bonds).

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

calculate the Market value of each of the bonds using PV function in Excel

MV of Bond 1 = 16,106.40

MV of bond 2 = 27,893.23

MV of Bond 3 = 12,659.00

Amount weight cost weight*cost
Bond1                     16,106.40 0.2843 12.0000% 0.0341
Bond2                     27,893.23 0.4923 8.0000% 0.0394
Bond3                     12,659.00 0.2234 10.0000% 0.0223

yield of portfolio = 9.58%

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You are considering a corporate bond with 5% coupon bonds with semiannual payments and a yield...
You are considering a corporate bond with 5% coupon bonds with semiannual payments and a yield to maturity of 6% . The bonds mature in 8 years. What is the market price per bond if the face value is $1,000?
A corporation has a bond outstanding that makes semiannual coupon interest payments. The coupon rate for...
A corporation has a bond outstanding that makes semiannual coupon interest payments. The coupon rate for the bond is 3.2 percent, the YTM (yield to maturity) is 4.5 percent, the par value is $1,000 and the bond has 12 years to maturity. If interest rates remain unchanged, what will the price of the bond be in 3 years?
The outstanding bonds of International Plastics mature in 6 years and pay semiannual interest payments of...
The outstanding bonds of International Plastics mature in 6 years and pay semiannual interest payments of $33.50 each on a $1,000 face value bond. The bonds are currently selling for $1,008.64. The coupon rate is ________ percent, the current yield is ________ percent, and the yield to maturity is ________ percent. 6.70; 6.64; 6.52 6.55; 6.91; 6.75 6.70; 6.78; 6.57 6.55; 6.86; 6.60
bond Valuation with Semiannual Payments Renfro Rentals has issued bonds that have a 6% coupon rate,...
bond Valuation with Semiannual Payments Renfro Rentals has issued bonds that have a 6% coupon rate, payable semiannually. The bonds mature in 7 years, have a face value of $1,000, and a yield to maturity of 9.5%. What is the price of the bonds? Round your answer to the nearest cent. $
1. Assume Par value of $1,000 and semiannual coupon payments for all: A bond has a...
1. Assume Par value of $1,000 and semiannual coupon payments for all: A bond has a coupon rate of 8.6% and 11 years until maturity. If the yield to maturity is 7.6%... a) is the bond selling at a discount, premium or at face value? b) what is the price of the bond? c) if market rates rose (such that bonds of equal credit risk were now paying 8% (new YTM = 8%), would that make the price of the...
wine and roses,ınc., offers a bond with a coupon of 9.50 percent with semiannual payments and...
wine and roses,ınc., offers a bond with a coupon of 9.50 percent with semiannual payments and yield to maturity of 10.56 percrnt.The bonds maturr in 8 years.what is market price of a 1.000 face value bond?
Bond P is a premium bond making semiannual payments. The bond pays a coupon rate of...
Bond P is a premium bond making semiannual payments. The bond pays a coupon rate of 8 percent, has a YTM of 6 percent, and has 12 years to maturity. Bond D is a discount bond making semiannual payments. This bond pays a coupon rate of 6 percent, has a YTM of 8 percent, and also has 12 years to maturity. The bonds have a $1,000 par value. What is the price of each bond today? If interest rates remain...
1. Omega Enterprises has an 8% coupon bond with exactly 16 years to maturity. Interest is...
1. Omega Enterprises has an 8% coupon bond with exactly 16 years to maturity. Interest is paid semi-annually. The bond is priced at $1,125 per $1,000 of face value. a.) What is the yield to maturity on this bond? b.)An investor purchased the bond at $1,125 and sold it 5 years later at a price of $1,023. What was the investor’s return. (Hint: calculate the YTM as in a) above but use the sale price as the future value. 2....
Bond x is a premium bond making semiannual payments. the bond has coupon rate of 8.3...
Bond x is a premium bond making semiannual payments. the bond has coupon rate of 8.3 percent, a ytm of 6.3 percent, and has 16 years to maturity. Bond y is a discount bond making semiannual payments. this bond has a coupon rate of 6.3 percent, a ytm of 8.3 percent, and also has 16 years to maturity. Assume the interest rates remain unchanged and both bonds have a par value of 1000. what are the prices of these bonds...
AMD offers 5 percent coupon bonds with semiannual payments and a yield to maturity of 8...
AMD offers 5 percent coupon bonds with semiannual payments and a yield to maturity of 8 percent. The bonds mature in 10 years. What is the market price per bond if the face value is $1,000? $1,002.60 796.14 $996.48 $891.47
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT