eoc_chapter_06 - Chapter 6 Problems 1-30 Input boxes in tan...

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Chapter 6 Problems 1-30 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green
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Chapter 6 Question 1 Input area: Coupon 10% Required rate of return 8% Output area: The yield to maturity is the required rate of return on a bond expressed as a nominal annual interest rate. For noncallable bonds, the yield to maturity and required rate of return are interchangeable terms. Unlike YTM and required return, the coupon rate is a fixed percentage of par over the life of the bond used to set the coupon payment amount. For the example given, the coupon rate on the bond is still 10% , and the YTM is 8% .
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Chapter 6 Question 2 Output area: Price and yield move in opposite directions; if interest rates rise, the price of the bond will fall. This is because fixed coupon payments determined by the fixed coupon rate are not as valuable when interest rates rise--hence, the price of the bond decreases.
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Chapter 6 Question 3 Input area: Settlement date 1/1/2000 Maturity date 1/1/2012 Coupon rate 9% Coupons per year 1 Face value $100 Yield to maturity 8% Output area: Price = $1,075.36
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Chapter 6 Question 4 Input area: Settlement date 1/1/2000 Maturity date 1/1/2008 Annual coupon rate 7% Coupons per year 1 Face value (% of par) 100 Bond price (% of par) 90.225 Output area: Yield to maturity = 8.75%
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Chapter 6 Question 5 Input area: Years to maturity 13 Settlement date 1/1/2000 Maturity date 1/1/2013 Coupons per year 1 Face value $1,000 Bond price 905 Yield to maturity 8.50% Output area: Coupon payment = $72.65 Coupon rate = 7.26%
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Chapter 6 Question 6 Input area: Settlement date 1/1/2000 Maturity date 1/1/2010 Coupon rate 7.50% Coupons per year 2 Face value $100 Yield to maturity 8.60% Output area: Price = $927.20
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Chapter 6 Question 7 Input area: Settlement date 1/1/2000 Maturity date 1/1/2013 Annual coupon rate 8.4% Coupons per year 2 Face value (% of par) 100 Bond price (% of par) 84 Output area: Yield to maturity = 10.71%
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Chapter 6 Question 8 Input area: Years to maturity 10.5 Coupons per year 2 Face value $1,000 Bond price 1,090 Yield to maturity 8.5% Output area: Present value of final payment = $417.26 Present value of coupon payments = 672.74 Coupon payment = 49.06 Coupon rate = 9.81%
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Question 9 Input area: Treasury rate 5.0%
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This note was uploaded on 05/01/2009 for the course FINC 106 taught by Professor Dr.nehale during the Spring '09 term at Baptist College of Health Sciences.

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eoc_chapter_06 - Chapter 6 Problems 1-30 Input boxes in tan...

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