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Chapter 7 Homework Solutions

Chapter 7 Homework Solutions - 45 PMT 829 PV 1104 PV I/YR =...

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Chapter 7 Homework Solutions 7.2) a. CY = 70/985 = 7.1% c. 14, N 1000, FV b. 2, □, P/YR 35, PMT □, BEG/END 7.2, I/YR 985, +/-, PV PV = \$989.15 1000, FV 35, PMT 20, N I/YR = 7.2% 7-3) 1000, FV 45, PMT 16, N 8.5, I/YR PV = \$1,028.60 7-4) YTM: 20, N YTC: 10, N 1000, FV 1050, FV 1100, +/-, PV 1100, +/-, PV 40, PMT 40, PMT I/YR = 6.62% I/YR = 6.49% Expect to earn 6.49% (YTC) since interest rates have declined. 7-6) a. Years to Maturity Price of Bond C Price of Bond Z 4 \$1,013.03 \$693.04 3 \$1,010.22 \$759.57 2 \$1,007.13 \$832.49 1 \$1,003.73 \$912.41 0 \$1,000.00 \$1,000.00 7-9) a. 1) 8, N 2) 8, N 1000, FV 1000, FV 45, PMT

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Unformatted text preview: 45, PMT 829, +/-, PV 1104, +/-, PV I/YR = 14.8% I/YR = 6.03% b. Yes, since the YTM is 14.8% 7.13) 10, N CY = .0821 = 80 / Price 1000, FV Price = \$974.42 40, PMT 974.42, +/-, PV I/YR = 8.6% 7.14) 14, N Since PMT = \$55, annual interest = \$110. 1020, +/-, PV 1000, FV So, CY = 110 / 1020 = 10.78% 10.5883, I/YR PMT = \$55 7-20) a. YTM: 1000, FV b. YTC: 1090, FV 20, N 10, N 55, PMT 55, PMT 1175, +/-, PV 1175, +/-, PV I/YR = 8.4% I/YR = 8.2% c. Expect to earn 8.2% (YTC) since interest rates have declined....
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