he table below gives you some information with respect to bonds. Calculate the yield-to-maturity for all these bonds. Assume you hold till maturity what would you pick?
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A:
The table below gives you some information with respect to bonds. Calculate the yield-to-maturity for all these bonds. Assume you hold till maturity what would you pick?
|
Company |
Settlement |
Price |
Maturity |
Coupon |
YTM |
|
Morgan Stanley |
2/10/2023 |
100.85 |
2/25/2023 |
3.75 |
? |
|
Fidelity |
2/10/2023 |
99.839 |
3/01/2023 |
0.375 |
? |
|
Caterpillar |
2/10/2023 |
100.00 |
3/01/2023 |
2.625 |
? |
|
NextEra Energy |
2/10/2023 |
99.889 |
3/01/2023 |
0.650 |
? |
|
BNP Paribas |
2/10/2023 |
100.08 |
3/03/2023 |
3.250 |
? |
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- You are given the following prices and cash flows associated with bonds. CF stands for cash flow. Bond Price Today CF Year 1 CF Year 2 CF Year 3 A 105.185 10 10 110 B 90.371 100 0 0 C 91.784 5 105 0 D X 15 15 115 What is the current price of Bond D as per the no-arbitrage principle? In other words, what is the value of X?From page 9-2 of the VLN, what is the first thing you want to identify when approaching a bond problem? Group of answer choices A. Annual bond or semiannual bond B. Whether the market rate is different from the stated rate. C. The cash flows provided by the bond. D. The company's debt to equity ratio.The following information about bonds A, B, C, and D are given. Assume that bond prices admit noarbitrage opportunities. What is the convexity of Bond D?Cash Flow at the end ofBond Price Year 1 Year 2 Year 3A 91 100 0 0B 86 0 100 0C 78 0 0 100D ? 5 5 105
- what is the price of the Pybus bonds if they receive an A rating will be $ ?Comment on the attractiveness of the bonds in two ways: a) How does the yield compare to the benchmark? Market YTM: 3.62% YTM of bond: 3.72% b) How does the current price compare to the benchmark-yield implied price? Price: 100.875 Implied price: 100.923Please explain how to arrive at the "Market Price of Bonds (% of face) = 94.285%" section in the excel sheet.
- A bond is currently selling for $980. This is a _____ bond which will ultimately experience a capital _____. Premium; gain Premium; loss Discount; gain Discount; lossCalculating the risk premium on bonds The text presents a formula where (1+1) = (1-p)(1 +i+x) + p(0) where i is the nominal interest rate on a riskless bond x is the risk premium p is the probability of default (bankruptcy) If the probability of bankruptcy is zero, the rate of interest on the risky bond is When the nominal interest rate for a risky borrower is 8% and the nominal policy rate of interest is 3%, the probability of bankruptcy is %. (Round your response to two decimal places.) When the probability of bankruptcy is 6% and the nominal policy rate of interest is 4%, the nominal interest rate for a risky borrower is %. (Round your response to two decimal places.) When the probability of bankruptcy is 11% and the nominal policy rate of interest is 4%, the nominal interest rate for a risky borrower is %. (Round your response to two decimal places.) The formula assumes that payment upon default is zero. In fact, it is often positive. How would you change the formula in this case?…The bond shown in the following table attached pays interest annually. a. Calculate the yield to maturity (YTM)for the bond. b. What relationship exists between the coupon interest rate and yield to maturity and the par value and market value of a bond? Explain.
- The bond shown in the following table pays interest annually in the table attached. a. Calculate the yield to maturity (YTM) for the bond. b. What relationship exists between the coupon interest rate and yield to maturity and the par value and market value of a bond? Explain.Given the coupons, par values, market rates and market prices below, please calculate the prices for bonds A-D and the yields for bonds D-G. Coupon Par value Market rate Cash flows: Price 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 Given the coupons, par values, market rates and market prices below, please calculate the prices for bonds A-D and the yields for bonds D-G. F 3.25% 6.0 6.5 7.0 B 7.5 8.0 2.1% с 1.8% B 2.6% 3.0% 2.8% E 3.1% D 0.0% 1,000 F 2.4% Coupon Par Value Cash flows: Market price Yield 0.5 1.0 1.5 INNM m 4 t nosono 2.0 2.5 3.0 3.5 4.0 4.5 5.0 H 5.5 6.0 6.5 7.0 7.5 8.0 2.40% (921) 4.40% (762) K (801) G 0.00% 1,000 (449)Using the previous information, correctly match each curve on the graph to it's corresponding issuing company. (Hint: Each curve indicates the path that each bond's price, or value, is expected to follow.) Curve A Curve B Curve C Based on the preceding information, which of the following statements are true? Check all that apply. O Johnson Incorporated's bonds have the highest expected total return. O The bonds have the same expected total return. O The expected capital gains yield for Smith, LLC's bonds is negative. O The expected capital gains yield for Smith, LLC's bonds is greater than 12%. Irwin Corporation's bonds have exhibited a substantial trading volume in the past few years. Its bonds would be referred to as a