1) Bond A has the following features:
Face value = $1,000,
Coupon Rate = 6%,
Maturity = 10 years, Yearly coupons
The market interest rate is 7.20%
If interest rates remain at 7.20%, what is the percentage capital gain or loss on bond A if you sell the bond in year 1?
State your answer to 2 decimal places (e.g., 3.56, 0.29)
If there is a capital loss make sure to include a negative sign in your answer (e.g., -0.23)
2) Bond E has the following features:
Face value = $1,000, Coupon Rate = 5%,
Maturity = 5 years, Yearly coupons
The market interest rate is 3.92%
If the interest rate remains at 3.92% for the life of the bond (i.e., 3.92 years), what is the price of Bond E in year 3?
3) Bond A has the following features:
Face value = $1,000,
Coupon Rate = 3%,
Maturity = 5 years, Yearly coupons
The market interest rate is 6.59%
What is the current yield for bond A from today to year 1?
Calculate your answer to 2 decimal places (e.g., 5.23)
1)
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