March%204%20Pre%20Town%20Meeting - Chapter 7 Bonds Their...

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Chapter 7 Bonds & Their Valuation
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Announcements Bond Price Relationships Bond Risk Bond Quotes Other Bond Provisions
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Chapter 7 Compass Post-quiz due by 8 PM Friday, Mar. 5. Chapter 8 Compass Pre-Flight due by 8PM Monday, Mar. 9. Bond/CAPM Project (project #2) is available in Group Projects folder and is due by 10 PM, Sunday, Mar. 15.
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Students should understand and be able to do the following from Chapter 7. Understand the vocabulary that describes bonds and the markets in which they trade. Annual and semi-annual bond valuation. Interpret the relationship between bond prices and interest rates. Calculate yield to maturity and yield to call. Understand what factors cause bond prices to change. Understand how call provisions, sinking fund provisions, interest rate risk and default risk affect bond returns and prices.
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The following two $1000 par value bonds both have a 7% YTM, make annual coupon payments and have 10 years to maturity. Search Doogle has a 9% coupon rate.
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This note was uploaded on 03/04/2009 for the course FIN 221 taught by Professor Dyer during the Spring '08 term at University of Illinois at Urbana–Champaign.

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March%204%20Pre%20Town%20Meeting - Chapter 7 Bonds Their...

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