The following is a T-bond quote (par value $1,000) from the WSJ (8/31/2018). Use the information in the quote to answer the question. Maturity Coupon Bid Asked Chg Asked Yield 8/31/2,034 11.68 104:15 104:20 -14 ??? How much is the premium or discount of this bond? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16). Use a negative sign to represent a discount.)

The following is a T-bond quote (par value $1,000) from the WSJ (8/31/2018). Use the information in the quote to answer the question. Maturity Coupon Bid Asked Chg Asked Yield 8/31/2,034 11.68 104:15 104:20 -14 ??? How much is the premium or discount of this bond? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16). Use a negative sign to represent a discount.)

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter11: Bond Pricing And Amortization (bonds)

Section: Chapter Questions

Problem 3R

See similar textbooks

Similar questions

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
(PLEASE READ THIS DIRECTION)Rules for Bond Valuation Problem Solving:a. For the "PV FACTOR in computing the PV of the coupon and PV for the maturity value/ principal use until 8-9th decimal place" before multiplying the coupon payment or future value.Example: ___x 2.123456789 or 22.12345678b. For "COMPOUNDED RATES" include all decimals in the rate (do not round off).Example semi-annual: 13%/2 =0.065c. For the "VALUE OF THE BOND/ PRICE OF THE BOND" round off your answers and final answers into whole numbers.Example: 824.59= 825 1. A bond issued by Delta Corporation matures in 12 years. It has a 12.5 percent annual coupon rate and a face value of P10,000. The bond has a discount rate to maturity of 9.5 percent. What is the price of Omega's bond today?
(PLEASE READ THIS DIRECTION)Rules for Bond Valuation Problem Solving:a. For the "PV FACTOR in computing the PV of the coupon and PV for the maturity value/ principal use until 8-9th decimal place" before multiplying the coupon payment or future value.Example: ___x 2.123456789 or 22.12345678b. For "COMPOUNDED RATES" include all decimals in the rate (do not round off).Example semi-annual: 13%/2 =0.065c. For the "VALUE OF THE BOND/ PRICE OF THE BOND" round off your answers and final answers into whole numbers.Example: 824.59= 825 2. Your sister has been offered a 5-year bond with a P1,000 par value and a 7 percent coupon rate. This bond's interest is paid semi-annually. If your sister is to earn a nominal rate of return of 9 percent, compounded semi-annually, how much should she pay for the bond?
(PLEASE READ THIS DIRECTION)Rules for Bond Valuation Problem Solving:a. For the "PV FACTOR in computing the PV of the coupon and PV for the maturity value/ principal use until 8-9th decimal place" before multiplying the coupon payment or future value.Example: ___x 2.123456789 or 22.12345678b. For "COMPOUNDED RATES" include all decimals in the rate (do not round off).Example semi-annual: 13%/2 =0.065c. For the "VALUE OF THE BOND/ PRICE OF THE BOND" round off your answers and final answers into whole numbers.Example: 824.59= 825 3. Assume that Greenwich and Pizza Hut have similar P100,000 par value bond issues outstanding. The bonds are equally risky. Pizza Hut bond has an annual coupon rate of 8 percent and matures 20 years from today, the nominal annual rate of return is 12%. Greenwich's bond has a coupon rate of 8 percent, with interest paid semiannually, matures in 20 years, and nominal required rate of return 12 percent on a semi-annual basis. What is the DIFFERENCE in current…
(PLEASE READ THIS DIRECTION)Rules for Bond Valuation Problem Solving:a. For the "PV FACTOR in computing the PV of the coupon and PV for the maturity value/ principal use until 8-9th decimal place" before multiplying the coupon payment or future value.Example: ___x 2.123456789 or 22.12345678b. For "COMPOUNDED RATES" include all decimals in the rate (do not round off).Example semi-annual: 13%/2 =0.065c. For the "VALUE OF THE BOND/ PRICE OF THE BOND" round off your answers and final answers into whole numbers.Example: 824.59= 8251. Charlie Corporation is a chemical company. The company issued an outstanding bond with a P100,000 par value at 15-year maturity date. The coupon rate is 8%, and interest is paid quarterly. The required nominal interest rate on this borrowings has now increased to 16 percent . What is the current market value of the bond?
The following table summarizes prices of various default-free zero-coupon bonds ( $100 face value): Maturity (years) 1 2 3 4 5 {:[" Price (per "$100],[" face value) "]:} $96.33 $91.98 $87.41 $82.53 $77.41 a. Compute the yield to maturity for each bond. b. Plot the zero-coupon yield curve (for the first five years). c. Is the yield curve upward-sloping, downward-sloping, or flat? Note: Assume annual compounding. a. Compute the yield to maturity for each bond. The yield on the 1-year bond is %. (Round to two decimal places.) The yield on the 2-year bond is %. (Round to two decimal places.) The yield on the 3-year bond is %. (Round to two decimal places.) The yield on the 4-year bond is enter your response here%. (Round to two decimal places.) Part 5 The yield on the 5-year bond is enter your response here%. (Round to two decimal places.) Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will…
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: 100.923
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
H5. Which of the following is the name of the semiannual payment of $20 that you receive on a bond you own? a. Face Value b. Discount c. Yield d. Call Premium e. Coupon Explain with details and also explain wrong options
Calculating 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 following Bond Data is provided on the FINRA website: Suppose Today's date is 07/11/2023 • Bond Maturity Date: 07/11/2031 Today's Bond Price: $81.95 Bond PAR value: $100 Bond Coupon Rate: 1.8% (coupons are paid semiannually). What is the computed yield to maturity of this Bond? Enter your answer in the format: 0.1234 Hint: Gather N, PV, PMT, FV and compute I/Y; Assume there are 365 days in a year.
Explain what you see from the pricing calculations. How do the two bonds differ? Bond C Bond Price = PV(rate,nper,pmt,fv) Given: n = Period which takes values from 0 to the nth period = 0,1,2,3 & 4 Cn = Coupon payment in the nth period = 10%*$1,000 = $100 YTM = interest rate or required yield = 9.6% P = Par Value of the bond = $1,000 Bond Z Bond Price = PV(rate,nper,pmt,fv) Given: n = Period which takes values from 0 to the nth period = 0,1,2,3 & 4 Cn = Coupon payment in the nth period = 0%*$1,000 = $0.00 YTM = interest rate or required yield = 9.6% P = Par Value of the bond = $1,000 years Bond A Bond Z 4 $1,012.79 $693.04 3 $1,010.02 $759.57 2 $1,006.98 $832.49 1 $1,003.65 $912.41 0 $1,000.00 $1,000.00