Finding the Price of Semiannual Bonds Let us compute the price of a sample bond. Suppose the bonds have a 10% coupon rate, a $1,000 par value (maturity value), and mature in two years. Assume semiannual compounding and that market rates of interest are 12%. Homework
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Finding the Price of Semiannual Bonds
Let us compute the price of a sample bond. Suppose the bonds have a 10% coupon
rate, a $1,000 par value (maturity value), and mature in two years. Assume semiannual
compounding and that market rates of interest are 12%.
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- Preview ●●● E View Edit File V Go Tools 6. Problem 5-12 (Bond Yields and Rates of Return) Window Help Screen Shot 2023-03-06 at 8.44.56 PM H Problem Walk-Through a. What is the bond's yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % 2 b. What is the bond's current yield? Do not round intermediate calculations. Round your answer to two decimal places. % eBook Bond Yields and Rates of Return A 25-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 4 years at a call price of $1,100. The bond sells for $950. (Assume that the bond has just been issued.) d. What is the band's yield to call? Do not round intermediate calculations. Round your answer to two decimal places. % HARD c. What is the bond's capital gain or loss yield? Capital loss yield, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. % $ Save & Continue Continue without saving Q 0…Academic Portal LIBIS-Sampoerna. Dashboard VitalSource Booksh... Spotify-Web Player Company XYZ's bonds have 12 years remaining to maturity, interest is paid annually, the bonds have $1,000 par value, and the coupon rate is 8%. The bonds have a yield to maturity of 9%. What is the current market price of these bonds?* a. 828.78 b. 968.39 C. 1,000,00 d. 1,075.36 e. none of the abovea. Reset the Data Section to its initial values. The price of this bond is 1,407,831. What would it be if there were only 9 or 8 years to maturity? Use the worksheet to compute the bond issue prices and enter them in the spaces provided. Bond issue price (9 years to maturity) __________________ Bond issue price (8 years to maturity) __________________ b. Compare these prices to the bond-carrying values found in the effective interest amortization schedule you originally printed out in requirement 3. Explain the similarity. c. Click the Chart sheet tab. The chart presented shows the price behavior of this bond based on years to maturity. Explain what effect years to maturity has on bond prices. Check your explanation by trying 8% as the effective rate (cell E10) and clicking the Chart sheet tab again. Also try 9%. When the assignment is complete, close the file without saving it again. Worksheet. Modify the BONDS3 worksheet to accommodate bonds with up to 20-year maturity. Use your new model to determine the issue price and amortization schedules of a 2,000,000, 18-year, 10% bond issued to yield 9%. Preview the printout to make sure that the worksheet will print neatly, and then print the worksheet. Save the completed file as BONDST. Hint: Expand both amortization schedules to 20 years. Expand the scratch pad to 20 years. Modify FORMULA1 in cell F17 to include the new ranges. Chart. Using the BONDS3 file, prepare a line chart that plots annual interest expense over the 10-year life of this bond under both the straight-line and effective interest methods. No Chart Data Table is needed. Put A23 to A32 in the Label format and then select A23 to A32, D23 to D32, and B40 to B49 as a collection. Enter all appropriate titles, legends, formats, and so forth. Enter your name somewhere on the chart. Save the file again as BONDS3. Print the chart.
- wwww. aa s w at 的Find Replace rt et Select all Editing mproperly. 2. Zachary is considering buying a bond issued by CSD that pays coupon interest semi-annually, has 17 years remaining to maturity, and has a coupon rate of 6.00%. If the bond sells for $990.00, then yield-to-maturity is %. Assume a $1,000 par value.The current zero-coupon yield curve for risk-free bonds is as follows: What is the price per $100 face value of a two-year, zero-coupon, risk-free bond? Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Maturity (years) YTM View an example Get more help - % 5 J 1 5.01% B 6 Y MacBook Pro H 2 5.52% & 7 N Print U J * 8 3 5.78% Done M 1 ( 9 K 4 5.94% < V 20 0 5 6.06% X command V ↓ X Clear all 1 { + = Check answer deleteplease do the compuations and formulas, show it to me explain steps of fianncial calculator C Compute the YTM for a bond with the listed information. Annual Coupon Par Maturity Bond Price Semiannual Coupon Maturity Bond Price Calculation 6,50% $1 000,00 15 ($980,00) N PMT FV PV I/Y YTM
- All computations must be done and shown manually Question 4 Complete the following table and draw a graph showing how bond price for each bond changes over time as they move towards their maturity dates. Describe the relationship between bond prices and time remaining for maturity. Years remaining to maturity BOND A Coupon. rate = 8% p.a. Market interest rate = 6% p.a. BOND B Coupon rate = 6% p.a. Market interest rate = 6% p.a. BOND C Coupon rate = 4% p.a. Market interest rate = 6% p.a. 10 9 8 7 6 5 4 3 2 1 0Video Excel Online Structured Activity: Bond valuation An investor has two bonds in her portfolio, Bond C and Bond Z. Each bond matures in 4 years, has a face value of $1,000, and has a yield to maturity of 8.2%. Bond C pays a 11.5% annual coupon, while Bond Z is a zero coupon bond. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. X Open spreadsheet Assuming that the yield to maturity of each bond remains at 8.2% over the next 4 years, calculate the price of the bonds at each of the following years to maturity. Do not round intermediate calculations. Round your answers to the nearest cent. Years to Maturity Price of Bond C Price of Bond Z 4 3 2 1 0 Check My Work LA जी A SA AA Reset Problem ta tA ta $ tAVideo Excel Online Structured Activity: Bond valuation An investor has two bonds in her portfolio, Bond C and Bond Z. Each bond matures in 4 years, has a face value of $1,000, and has a yield to maturity of 9.1%. Bond C pays a 10.5% annual coupon, while Bond Z is a zero coupon bond. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet Assuming that the yield to maturity of each bond remains at 9.1% over the next 4 years, calculate the price of the bonds at each of the following years to maturity. Do not round intermediate calculations. Round your answers to the nearest cent. Years to Maturity Price of Bond C Price of Bond Z 4 3 $ $ 2 $ 1 $ $ Check My Work Reset Problem
- StudentFunctions/Interface/acellus_engine.html?ClassID=1459772621# sK to 12 AAcellus-The Scienc.. M My Gmail A My Classes My Drive-Google D. Alget Bonds What is the yield on a corporate bond with a $1000 face value purchased at a discount price of $925, if it pays 7% fixed interest for the duration of the bond? yield = [ ? ] % Give your answer as a percent rounded to the nearest hundredth. Hint: yield = interest paid price paid Enter "lus Corporation. All Rights Reserved.Excel Online Structured Activity: Bond valuation An investor has two bonds in her portfolio, Bond C and Bond Z. Each bond matures in 4 years, has a face value of $1,000, and has a yield to maturity of 8.3%. Bond C pays a 10.5% annual coupon, while Bond Z is a zero coupon bond. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Assuming that the yield to maturity of each bond remains at 8.3% over the next 4 years, calculate the price of the bonds at each of the following years to maturity. Do not round intermediate calculations. Round your answers to the nearest cent. Years to Maturity Price of Bond C Price of Bond Z 4 $ $ 3 $ $ 2 $ $ 1 $ $ 0 $ $Bond valuationSemiannual interest Calculate the value of each of the bonds shown in the following table all of which pay interest semlannua below in order to copy its contents into a spreadsheet Coupon interest rate Years to maturity Required stated annual retum Bond Par Value $1.000 500 500 A B 12 14 The value of bond A is S710 98| (Round to the nearest cent.)