al t inte deb This assi ent is due in hard copy at the b ning of class on Monday
ID: 2791697 • Letter: A
Question
al t inte deb This assi ent is due in hard copy at the b ning of class on Monday, November 27th. No late assignments will be a Bond A 15 Bond B 15 annual Bond C 15 Bond D Bond E Bond G 20 annua semi-annuasemi-annua semi-annuasemi-annual Bond F 10 Bond H Bond I Bond J 10 semi-annual Years to maturity Annual or semi-annual Periods per year (1=annual, 2=semi-annual) Periods to maturity (Years to maturity x periods per year) Coupon rate Periodic coupon payment Par (or face) value Yield to maturity (re or i) (If bond is semi-annual, use semi-annual rate) 3.0% 8.0% 5.0% 5.0% 2.0% 10% 8.5% 4.5% 10.0% 50% $1,000 5.0% 1,000 5.0% $1,000 5.0% $1,000 5.0% $1,000 5.0% $1,000 1,000 5.0% $1,000 $1,000 $1,000 5.0% 5.0% 5.0% 5.0% Price today (PV Bon FV- I/YR (or r) trading at a discount, par, or premium?Explanation / Answer
Bond
A
B
c
D
E
F
G
G
I
J
Years to maturity
15
15
15
1
5
10
20
2
5
10
Annual or semi annual
annual
annual
annual
Semi annual
Semi annual
Semi annual
Semi annual
Semi annual
Semi annual
Semi annual
period per year
1
1
1
2
2
2
2
2
2
2
periods to maturity
15
15
15
2
10
20
40
4
10
20
coupon rate
3
8
5
5
2
7
8.5
4.5
10
5
periodic coupon payment
30
80
50
25
10
35
42.5
22.5
50
25
par value
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
YTM
5
5
5
5
5
5
5
5
5
5
PRICE TODAY = using present value function in Excel spreadsheet =pv(rate,nper,pv,fv,type)
($1,023.23)
($1,255.52)
($1,116.15)
($1,000.00)
($930.31)
($1,046.46)
($1,081.30)
($988.39)
($1,116.15)
($1,000.00)
FV
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
PMT
30
80
50
25
10
35
42.5
22.5
50
25
N
5
5
5
5
5
5
5
5
5
5
I
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
TRADING AT A DISCOUNT, PREMIUM OR PAR
At premium
At premium
At premium
At par
At discount
At premium
At premium
At discount
At premium
At par
Bond
A
B
c
D
E
F
G
G
I
J
Years to maturity
15
15
15
1
5
10
20
2
5
10
Annual or semi annual
annual
annual
annual
Semi annual
Semi annual
Semi annual
Semi annual
Semi annual
Semi annual
Semi annual
period per year
1
1
1
2
2
2
2
2
2
2
periods to maturity
15
15
15
2
10
20
40
4
10
20
coupon rate
3
8
5
5
2
7
8.5
4.5
10
5
periodic coupon payment
30
80
50
25
10
35
42.5
22.5
50
25
par value
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
YTM
5
5
5
5
5
5
5
5
5
5
PRICE TODAY = using present value function in Excel spreadsheet =pv(rate,nper,pv,fv,type)
($1,023.23)
($1,255.52)
($1,116.15)
($1,000.00)
($930.31)
($1,046.46)
($1,081.30)
($988.39)
($1,116.15)
($1,000.00)
FV
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
PMT
30
80
50
25
10
35
42.5
22.5
50
25
N
5
5
5
5
5
5
5
5
5
5
I
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
TRADING AT A DISCOUNT, PREMIUM OR PAR
At premium
At premium
At premium
At par
At discount
At premium
At premium
At discount
At premium
At par