CHAPTER8HANDOUT

CHAPTER8HANDOUT - 4) A 15 year fixed coupon bond with 12...

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Chapter 8 and 9 Problems: 1) A 20 year fixed coupon bond with 10 years left until maturity has a coupon rate of 5% paid annually and is currently trading with a yield of 6%. What is the price of this bond? 2) A 10 year fixed coupon bond with 8 years left until maturity has a coupon rate of 4% paid annually and currently has a price of $945. What is the yield of this bond? 3) A Zero-coupon bond currently has 3 years left to maturity and is trading at a yield of 3.5%. What is the price of this bond?
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Unformatted text preview: 4) A 15 year fixed coupon bond with 12 years left until maturity has a coupon rate of 8% paid semi-annually. If the price of this bond is $1,050, what is its current yield? 5) Google Inc. has a Beta () equal to 2.5. If the market return is 10% and the risk free rate is 3%, what is the required rate of return for Google? What is its risk premium? 6) A consol bond has a yield of 6% and has a coupon rate of 8% paid semi-annually. What is the price of this bond?...
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CHAPTER8HANDOUT - 4) A 15 year fixed coupon bond with 12...

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