You hold two bonds. You own a $1,000 face value bond from Company B that eleven years to maturity. The other is a $1,000 face value bond from A Corporation that has 8.6% coupons paid once per year, and eleven years to maturity. The market (YTM) for both bonds is 6.6%. a. What is the current yield for Bond A? For Bond B? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 12.34.) b. If the YTM remains unchanged, what is the expected capital gains yield over the next year for Bond A? For Bond B? (Hint: you will need to solve the price of each bond next year to find the capital gains yield. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers od to? decimal places, e.g., 32.16.)

Do not use excel, use formulas to compute the question You have two bonds, Bond A and bond B: A 3-year zero-coupon bond with face value of $1,000 with a yield-to-maturity of 4%. A 6-year bond with an annual coupon payment C (to be paid out starting a year from now), a face value of $1,000 and yield-to-maturity of 5%. Assume that compounding takes place annually.  If the price of Bond A is equal to the price of Bond B, what is the value of Bond B’s coupon payments (C)?

(c) Re-calculate the prices of the bonds if the required return falls to 9%.(d) Explain how underwriters use the overallotment option in IPOs.

Suppose the investor sells his bonds before maturity and uses some of the proceeds to purchase a zero-coupon T-Bill with a $100 face value and 6-month maturity. What is the effective annual rate (EAR) if it was purchased for $95.52?

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

Need help with C Approximate yield to maturity   An investor must choose between two bonds:   Bond A pays $90 annual interest and has a market value of $815. It has 15 years to maturity. Bond B pays $81 annual interest and has a market value of $700. It has eight years to maturity.   Assume the par value of the bonds is $1,000.   a. Compute the current yield on both bonds. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Current Yield Bond A11.04% Bond B11.57%   c. A drawback of current yield is that it does not consider the total life of the bond. For example, the approximate yield to maturity on Bond A is 11.51 percent. What is the approximate yield to maturity on Bond B? The exact yield to maturity? (Use the approximation formula to compute the approximate yield to maturity and use the calculator method to compute the exact yield to maturity. Do not round intermediate calculations. Input your answers as a percent rounded to 2…

Suppose that your firm issued a bond with 10 years until maturity, a face value of $1000, and a coupon rate of 7% (annual payments). The yield to maturity on this bond when it was issued was 6%. For questions e-g, assume that this bond DOES NOT pay any coupon a) What was its price when it was issued? b) For this zero-coupon bond, suppose it is actually sold for $500, what should the YTM be?

What is the Macaulay duration of a bond with a coupon of 5.8 percent, eleven years to maturity, and a current price of $1,060.10? What is the modified duration? (Do not round intermediate calculations. Round your answers to 3 decimal places.)