Bond Valuation Find Bond Price Input area: Settlement date 10/30/05 Maturity dat
ID: 2712813 • Letter: B
Question
Bond Valuation Find Bond Price Input area: Settlement date 10/30/05 Maturity date 10/30/15 Coupon rate 10% Coupons per year 2 Face value $1,000 Selling Price(% of face Value) 115% It can be called in 8 years at $1070 Output area: N = PMT = FV = Price = Yield to Maturity (YTM) = N = PMT = FV = Price = Yield to Call (YTC) = Bond Valuation Find Bond Price Input area: Settlement date 10/30/05 Maturity date 10/30/15 Coupon rate 10% Coupons per year 2 Face value $1,000 Selling Price(% of face Value) 115% It can be called in 8 years at $1070 Output area: N = PMT = FV = Price = Yield to Maturity (YTM) = N = PMT = FV = Price = Yield to Call (YTC) =Explanation / Answer
Face value (FV) $ 1,000.00 Coupon rate 10.00% Number of compounding periods per year 2 Interest per period (PMT) 50.00 Bond price (PV) $ (1,150.00) Number of years to maturity 10 Number of compounding periods till maturity (NPER) 20 Bond Yield to maturity RATE(NPER,PMT,PV,FV)*2 Bond Yield to maturity 7.81% Call price (here it is FV) $ 1,070.00 Coupon rate 10.00% Number of compounding periods per year 2 Interest per period (PMT) 60.00 Bond price (PV) $ -1,150.00 Number of years to call 8 Number of compounding periods till call (NPER) 16 Bond Yield to call RATE(NPER,PMT,PV,FV)*2 Bond Yield to call 9.84%