HW3 - Current Yield 0.13 Same holds for the price moving...

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YTM 32 As the bond moves further toward maturity it will move Coupon Rate 0.12 closer to the par value – and toward the $1000 price mark. K 0.11 The capital gains/loss yield is negative because the bond is selling PV $1,137.01 a premium – at a price over par. When K falls below Current Yield 0.11 the coupon rate, the bond’s value rises above its par value. Capital Gains/Loss Yield 0.14 K 0.13 The capital gains/loss yield is positive because the bond is selling PV $924.62 at a discount – the opposite of the reasoning above.
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Unformatted text preview: Current Yield 0.13 Same holds for the price moving towards par value closer to Capital Gains/Loss Yield-0.08 maturity – the $1000 price mark. YTM 32 25 20 10 3 0.15 $802.28 $806.08 $812.22 $849.44 $931.50 0.13 $924.62 $926.70 $929.75 $945.74 $976.39 0.12 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 0.1 $1,190.53 $1,181.54 $1,170.27 $1,122.89 $1,049.74 0.05 $2,106.19 $1,986.58 $1,872.35 $1,540.52 $1,190.63 Daniel Shriver HW # 3 - Bond Valuation...
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This note was uploaded on 12/07/2009 for the course FIRE 312 taught by Professor Salandro during the Spring '09 term at VCU.

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