Ch_07_Inclass_Exercise_Solutions_01

Ch_07_Inclass_Exercise_Solutions_01 - Ch 07 Inclass...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Ch 07 Inclass Exercises Solutions 1. Suppose you are looking at a bond that has a 10% annual coupon and a face value of $1000. There are 20 years to maturity and the yield to maturity is 8%. What is the price of this bond? (1,196.36) Annual Coupon Bonds Find Current Price Coupon Rate 10.00% Years 20 Yield-to-Maturity (YTM) 8.00% Face Value 1,000 # of periods 20 Coupon Payment per period 100 Period rate 8.0000% APR 8.00% EAR 8.00% Current Price 1,196.36 2. Suppose you are looking a 7 year semiannual coupon bond with a coupon rate of 14% and priced to yield 16% to maturity. What is the price of this bond? (917.56) Semiannual Coupon Bonds Find Current Price Coupon Rate 14.00% Years 7 Yield-to-Maturity (YTM) 16.00% Face Value 1,000 # of periods 14 Coupon Payment per period 70 Period rate 8.0000% APR 16.00% EAR 16.64% Current Price 917.56
Background image of page 1

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

View Full DocumentRight Arrow Icon
2 3. Consider a bond with a 10% annual coupon rate, 15 years to maturity and a par value of $1,000. The current price is $928.09.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/29/2011 for the course FINANCE 332 taught by Professor Linney during the Fall '11 term at Guilford Tech.

Page1 / 3

Ch_07_Inclass_Exercise_Solutions_01 - Ch 07 Inclass...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online