KIC000057 - I cfw,L-L-~-~ ~-~ Finance 320 Problem Set#8 1...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
I \ { ,L--_----L--~~------~ ~ --- -- -----~
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Finance 320 Problem Set#8 1. You wish to purchase a20-year bond that has amaturity value ofSlooo and makes semi-annual interest payments of $40. Ifyou require a 10%yield to maturity on this investment, what isthe maximum price you would pay for the bond? 2. You can purchase a S1000 face value bond with 15years to maturity for $1124. The bond pays asemi-annual coupon. The market requires areturn of 8% on similar bonds. What is the coupon rate? 3. Suppose you read inthe Wall Street Journal that abond with facevalue S100has an annual coupon rate of 9% and a price of$71. What isthe bond's current yield? 4. Moe's Inc. has bonds outstanding with a par value of S1000 and 10years to maturity. These bonds pay a coupon of$45 every six months. Current market conditions are such that the bond sells for $938. Calculate the yield to maturity onthe issue. 5. Four years agoyou bought a SIOOOpar value, Io-year bond that pays interest annually. The bond has acoupon rate of 10%.However, this bond was callable atthe end ofyear 5at aprice of$1200. The bond iscurrently
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern