Week 6 635 Solutions

Week 6 635 Solutions - Chapter 5 Bonds, Bond Valuation, and...

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

View Full Document Right Arrow Icon
Bonds, Bond Valuation, and Interest Rates 5-7 The problem asks you to find the price of a bond, given the following facts: N = 16; I/YR = 8.5/2 = 4.25; PMT = 50; FV = 1000. With a financial calculator, solve for PV = $1,085.80 5-8 With your financial calculator, enter the following to find YTM: N = 10 × 2 = 20; PV = -1100; PMT = 0.08/2 × 1,000 = 40; FV = 1000; I/YR = YTM = ? YTM = 3.31% × 2 = 6.62%. With your financial calculator, enter the following to find YTC: N = 5 × 2 = 10; PV = -1100; PMT = 0.08/2 × 1,000 = 40; FV = 1050; I/YR = YTC = ? YTC = 3.24% × 2 = 6.49%. 5-9 a. 1. 5%: Bond L: Input N = 15, I/YR = 5, PMT = 100, FV = 1000, PV = ?, PV = $1,518.98. Bond S: Change N = 1, PV = ? PV = $1,047.62. 2. 8%: Bond L: From Bond S inputs, change N = 15 and I/YR = 8, PV = ?, PV = $1,171.19. Bond S: Change N = 1, PV = ? PV = $1,018.52. 3. 12%: Bond L: From Bond S inputs, change N = 15 and I/YR = 12, PV = ? PV = $863.78. Bond S: Change N = 1, PV = ? PV = $982.14. b.
Background image of page 1

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

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

Week 6 635 Solutions - Chapter 5 Bonds, Bond Valuation, and...

This preview shows document pages 1 - 2. Sign up to view the full document.

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