Homework #4F (Bond Yield to Call. YTM and
Price after original Issue)
point
What is the yield to call of a 20-year to maturity bond that pays a coupon rate of 6.54
percent per year, has a $1,000 par value, and is currently priced at $1,104? The bond can
be called back in 7 years at a call price $1,056. Assume annual coupon payments.
1000*6.54% = 65.4
=RATE(7,65.4,-1104,1056,0)
Answer:
5.40 %
0/1
Question
point
2
Bright Sun, Inc. sold an issue of 30-year $1,000 par value bonds to
the public. The bonds had a 14.52 percent coupon rate and paid
interest annually. It is now 11 years later. The current market rate
of interest on the Bright Sun bonds is 8.69 percent. What is the
current market price (intrinsic value) of the bonds?
Round the answer to two decimal places.
Answer:
1,122.5
(1,533.15)
4
0/1
Question 3 point
5 years ago, Delicious Mills, Inc. issued 30-year to maturity bonds
that had a 11.10 percent annual coupon rate, paid semiannually.
The bonds had a $1,000 face value. Since then, interest rates in
general have changed and the yield to maturity on the Delicious
Mills bonds is now 10.84 percent. Given this information, what is
the price today for a Delicious Mills bond?
Round the answer to two decimal places.
Answer:
10.24 (1,022.27)
YTM after original
issue
point
This study source was downloaded by 100000872281541 from CourseHero.com on 09-27-2023 09:08:18 GMT -05:00
https://www.coursehero.com/file/33093172/Homework-4Fdocx/
Price after original Issue)
point
What is the yield to call of a 20-year to maturity bond that pays a coupon rate of 6.54
percent per year, has a $1,000 par value, and is currently priced at $1,104? The bond can
be called back in 7 years at a call price $1,056. Assume annual coupon payments.
1000*6.54% = 65.4
=RATE(7,65.4,-1104,1056,0)
Answer:
5.40 %
0/1
Question
point
2
Bright Sun, Inc. sold an issue of 30-year $1,000 par value bonds to
the public. The bonds had a 14.52 percent coupon rate and paid
interest annually. It is now 11 years later. The current market rate
of interest on the Bright Sun bonds is 8.69 percent. What is the
current market price (intrinsic value) of the bonds?
Round the answer to two decimal places.
Answer:
1,122.5
(1,533.15)
4
0/1
Question 3 point
5 years ago, Delicious Mills, Inc. issued 30-year to maturity bonds
that had a 11.10 percent annual coupon rate, paid semiannually.
The bonds had a $1,000 face value. Since then, interest rates in
general have changed and the yield to maturity on the Delicious
Mills bonds is now 10.84 percent. Given this information, what is
the price today for a Delicious Mills bond?
Round the answer to two decimal places.
Answer:
10.24 (1,022.27)
YTM after original
issue
point
This study source was downloaded by 100000872281541 from CourseHero.com on 09-27-2023 09:08:18 GMT -05:00
https://www.coursehero.com/file/33093172/Homework-4Fdocx/
