If the contract rate on the bond is 13% and the market interest rate at the time of sale is 12.2%, then the bond will sell at: Multiple Choice O Cannot be sold in the market Discount Unable to answer with the data provided Premium Par
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- Calculate YTC using a financial calculator by entering the number of payment periods until call for N, the price of the bond for PV, the interest payments for PMT, and the call price for FV. Then you can solve for 1/YR YTC. Again, remember you need to make the appropriate adjustments for a semiannual bond and realize that the calculated 1/YR is on a periodic basis so you will need to multiply the rate by 2 to obtain the annual rate. In addition, you need to make sure that the signs for PMT and FV are identical and the opposite sign is used for PV; otherwise, your answer will be incorrect. A company is more likely to call its bonds if they are able to replace their current high-coupon debt with less expensive financing. A bond is more likely to be called if its price is above par-because this means that the going market interest rate is less than its coupon rate. Quantitative Problem: Ace Products has a bond issue outstanding with 15 years remaining to maturity, a coupon rate of 8.4%…Can the price of bond B be determined using the PV function or any other function in excel? What is the EAR (effective annual rate) of these two bonds?Assume you have treasury note .The contract price is 124 and you can deliver either bond A with conversion of 0.9 and price of 110 or a bond with conversion of 0.7 and price is 100. What will be the loss gain of the buyer? ( 1.77 -1.77 9.3 -9.3
- 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: 100.923Give typing answer with explanation and conclusion Consider a coupon bond with coupon payment=4.25, M=100, and n=2. Suppose ?1 = 4% and ?2 = 4.24%. Consider a forward contract for the delivery of the coupon bond in one period from today. Calculate the forward price using the following two approaches: 1) use the forward rate to price the forward contract; 2) use the cost of carry approach: spot-forward parity adjusted for the coupons.This first table describes prevailing market interest rates. Market Data Yield 0.05 Required: Using the yield above and the information contained in the table below, please calculate the price and duration of the bond as well as all necessary steps. (Use cells A5 to B5 from the given information to complete this question.) Time Until Payment Payment Discounted Payment Weight Time × Weight 1.00 $30.00 2.00 $30.00 3.00 $30.00 4.00 $1,030.00 Price: Duration
- Which of the following is the best explanation of what the call premium is? Group of answer choices The amount above the face value an investor must pay to purchase the bond. The additional amount above the face value that the company must pay to repay the bond early. The additional amount above the market price that a company must pay to repay the bond early. The amount above the market price that an investor must pay to purchase the bond.Please solve for all parts and questions (a-e) being asked in the problem. For example the question being asked in Part A is: What is the value of the bond if the market's required yield to maturity on a comparable-risk bond is 8 percent? Also, please show all work and steps.what is the price of the Pybus bonds if they receive an A rating will be $ ?
- Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1,000, and a coupon rate of 7% (annual payments). The yield to maturity on this bond when it was issued was 6%. What was the price of this bond when it was issued? Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section. Maturity (years) 10 Face value 1,000…Compute the Macaulay duration under the following conditions: a. A bond with a four-year term to maturity, a 10 percent coupon (annual payments), and a market yield of 8 percent. b. A bond with a four-year term to maturity, a 10 percent coupon (annual payments), and a market yield of 12 percent. c. Compare your answers to parts (a) and (b), and discuss the implications of this for classical immunization.Suresh Singh, CFA, is analyzing a convertible bond. The characteristics of the bond and the underlying common stock are given in the nearby table. Compute the bond's conversion value (round to dollar and no comma in your answer) Par value Annual coupon rate Conversion ratio Market price Straight debt value Current market stock price Annual cash dividend $1000 6.5% 20 110% of par value 105% of par value $50 $1.1 per share