Group Project 2 - Group Members: Gregory Scolaro Jacqueline...

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Group Members: Gregory Scolaro Jacqueline Abrahms Part 1: Bonds #1) Par Value: $1,000 Years to Maturity: 25 Annual Coupon Rate: 0.09 YTM's Bond Value's 2% 2,371.86 5% 1,567.25 8% 1,107.41 11% 830.68 14% 654.98 17% 537.38 Bond Name YTM Grease Gougers 2 Burns Power 15 Caterpillar 40 Bond Price Interest Rate (APR) Grease Gougers Burns Power 2% $1,117.06 $1,774.23 4% $1,076.15 $1,447.93 6% $1,037.17 $1,196.00 8% $1,000.00 $1,000.00 10% $964.54 $846.28 12% $930.70 $724.70 14% $898.38 $627.73
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Today's Price All-Comm Par Value ($) 1,000 Year's to Maturity (N) 20 Annual Coupon Payment ($) 0 Yield to Maturity 7% Price ($) $258.42 One Year from Today Par Value ($) 1,000 Year's to Maturity (N) 19 Annual Coupon Payment ($) 0 Yield to Maturity 5.50% All-Comm $361.58 Wally World $1,058.04 Short Circuit $1,754.50 Total Rate of Return Yield to Maturity 5.50% All-Comm 39.92% Wally World 25.05% Short Circuit 22.54% Which bond has the most interest rate risk based on thi Vandalay Industries Par value ($) 1,000 Annual Coupon Rate 6.80% Semiannual Coupon Rate 3.40% Annual Coupon Payment ($) 68 Semiannual Coupon Payment ($) 34 Years to Maturity (N) 12 Years to Maturity (N*2) 24 In general, longer-term bonds have more interest rate risk than shorter-term bonds. B same time to maturity, the lower coupon bonds have more interest rate risk; thus, All since it is a zero coupon bond (no coupon paymen
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Present Value ($) 890 Years to Call 3 Call Price ($) 1,065 Yield to Maturity 8.262354% Yield to Call 13.194143%
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Clay Balko Mallory Green Kevin Brown T.A. Section #2) Par value $1,000 8% 4% $80.00 $40.00 Caterpillar $2,646.65 $1,794.89 $1,302.01 $1,000.00 $804.04 $669.82 $573.34 Sangjeong Nam Annual Coupon Rate Semiannual Coupon Rate Annual Coupon Payment Semiannual Coupon Payment 2% 5% 8% 11% $0 $500 $1,000 $1,500 $2,000 $2,500 Bond Value vs. Required Returns YTM Bond Price $500.00 $1,000.00 $1,500.00 $2,000.00 $2,500.00 $3,000.00 Interest Ra Bond Value
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Wally World Short Circuit 1,000 1,000 20 20 60 120 7% 7% $894.06 $1,529.70 1,000 1,000 19 19 60 120 7% 8.50% $276.51 $212.24 $896.64 $768.31 $1,516.78 $1,324.37 7% 8.50% 7.00% -17.87% 7.00% -7.35% 7.00% -5.58% is analysis? #4) SatTV 1,000 6.80% 3.40% 68 34 12 24 But, since all three of the bonds have the ll-Comm has the most interest rate risk nt). Which return is more likely for each bond if marke current level over the nex Bonds that sell at a discount tend to increase in price a premium tend to decrease in price as time moves on. Th likely, while the YTC for SatTV is more likely if market in level over the next three years. Furthermore, the lower expect. 2%
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This note was uploaded on 05/05/2010 for the course FIN 221 taught by Professor Dyer during the Fall '09 term at University of Illinois, Urbana Champaign.

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Group Project 2 - Group Members: Gregory Scolaro Jacqueline...

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