A listed company has hired you to evaluate its recent issue of 2-year TIPS (Treasury Inflation-Protected Securities) with a semi-annual coupon payment clause and requires you to calculate the accrued principal and the coupon payment for the last 6 months. The information provided by the company is as follows: Par Value Coupon Rate 1000 1% First 6 months inflation 4% Second 6 months inflation 1% Third 6 months inflation 2% Fourth 6 months inflation 1% Note: Round the final values to two decimals.

A listed company has hired you to evaluate its recent issue of 2-year TIPS (Treasury Inflation-Protected Securities) with a semi-annual coupon payment clause and requires you to calculate the accrued principal and the coupon payment for the last 6 months. The information provided by the company is as follows: Par Value Coupon Rate 1000 1% First 6 months inflation 4% Second 6 months inflation 1% Third 6 months inflation 2% Fourth 6 months inflation 1% Note: Round the final values to two decimals.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You observe two most recently issued securities: 6-month T-Bill (zero coupon) with yield 5.25% p.a., and 2-year T-Note with coupon rate of 6% p.a. are selling at par of 100. All bonds in the market are semi-annual payments. Using this information to answer questions 19-20. Which of the following information would be incorrect?A. The current 6-month spot rate is 5.25% p.a.B. The yield to maturity of 2-year T-note is 6% p.a.C. The correct market price of 1-year Treasury note with par of 100 and coupon rate of 5.5% should be about 100.D. The spot rate in 1.5-year’s time should be 5.75% p.a.
Nikul
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The company expects to invest approximately $1 million in three months in corporate bonds. The current rate of interest is 5.10%. To hedge the position, the company wishes to use 3 year Treasury bond futures contracts trading at 9800. Calculate the profit or loss from the position in futures market if in 3 months the contracts are trading at 91.900. a. $168334.11 O b. $-16833.41 c. $-170862.48 O d. $392716.91 O e. $-1708624.84
On 1 July 2023 Tamasek Ltd issues convertible notes with a face value of $10 million. The convertible notes have a 20-year term and mature on 30 June 2043. Interest is payable semi-annually in arrears, i.e. on 31 December and 30 June each year, and the coupon rate of interest is 7.5% p.a., At around the same point in time, companies with a similar credit rating issue debt securities without a conversion option with a coupon rate of 10% p.a., payable semi-annually. Required: Determine the debt and equity components of the convertible notes issued using the residual valuation method. Prepare the entries of Tamasek Ltd to account for the convertible notes over the period 1 July 2023 to 30 June 2025.
Consider an investor who purchases a Treasury inflation-indexed note with an original principal amount of $100,000, a 2.875 percent annual coupon rate (coupon is paid semiannually), and 10 years to maturity. The semiannual inflation rate during the 6 months ending 3 months before the first coupon payment (the 3-month lag is necessary to allow for the release of the official CPI figures) is 0.97 percent. Over the next 6-month period inflation is 0.40 percent. Calculate the adjusted principal amount for the second coupon payment. Round the answer to two decimal places. Your Answer:
An insurance company is analyzing the following three bonds, each with five years to maturity, annual interest payments, and is using duration as its measure of interest rate risk. What is the duration of each of the three bonds? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) a. $10,000 par value, coupon rate=9.7%, r 0.17 b. $10,000 par value, coupon rate 11.7%, r= 0.17 c. $10,000 par value, coupon rate = 13.7%, p=0.17 Duration of the bond years
please answer all three parts within 30 minutes. make sure you answer all three parts. else negative rating for sure.
DIRECTIONS: Read and analyze the following problems and supply what is required and support it with necessary computations. 1. A company plans to issue a 25-year bond with a 12.5% interest rate, issued at a face value of P1, 000. The company is subject a 30% tax rate and expects a return on investment at 8%. Compute for the cost of debt issuance.
Heather Smith is considering a bond investment in Locklear Airlines. The $1,000 par value bonds have a quoted annual interest rate of 9 percent and the interest is paid semiannually. The yield to maturity on the bonds is 12 percent annual interest. There are 9 years to maturity. Compute the price of the bonds based on semiannual analysis. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Bond price
Please answer all questions and show all calculations. Thank you.

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