Consider the same bonda as the previous question, with an original term to maturity of 5...

Transcribed Image Text:

Consider the same bonda as the previous question, with an original term to maturity of 5 years, 7% coupon (paid semi-annually), 5% yield-to-maturity, $1000 face value. Suppose that the 4th coupon payment on this bond was just paid 25 days ago, and that there are a total of 180 days in the current coupon period. Calculate the following (Express BOTH answers with NO commas, rounded to TWO decimal places): Dirty Price of bond = $ Accrued Interest = $ Upload a picture of your work: Please select file(s) Select file(s) Q2 Bond pricing practice 10 Points Q2.1 Bond Pricing 2 Points Consider a bond with an original term to maturity of 5 years, 7% coupon (paid semi-annually), 5% yield-to-maturity, $1000 face value. Suppose that the 4th coupon payment on this bond was just paid, so there are now exactly 3 years until maturity. Calculate the price of the bond today (Express your answer with NO commas, rounded to TWO decimal places): Bond Price = $ Upload a picture of your work to show your calculations: Please select file(s) Select file(s) Save Answer Q2.2 Bond Duration 2 Points Consider the same bonda as the previous question, with an original term to maturity of 5 years, 7% coupon (paid semi-annually), 5% yield-to-maturity, $1000 face value. As before, suppose that the 4th coupon payment on this bond was just paid, so there are now exactly 3 years until maturity. Calculate the Modified Duration of the bond today (Express your rounded to TWO decimal places): Modified Duration of bond = Upload a picture of your work to show your calculations or, if you used Excel, upload your Excel file: Please select file(s) Select file(s) Formula for Macaulay Duration (with semi-annual coupons): t=1 1 1/2 Dmac P CF (1 + 1/2)" Q2.4 Bond price observation 2 Points If your calculations are correct in the previous question, then you should be able to calculate the "clean" price of the bond by subtracting your calculated accrued interest from your calculated dirty price (Clean Price = Dirty Price - Accrued Interest). Is your calculated clean price of the bond higher or lower than the price at the last coupon date? Do you have any explanation for the difference? [Try to keep your response at 3 sentences or less.] Save Answer Consider the same bonda as the previous question, with an original term to maturity of 5 years, 7% coupon (paid semi-annually), 5% yield-to-maturity, $1000 face value. Suppose that the 4th coupon payment on this bond was just paid 25 days ago, and that there are a total of 180 days in the current coupon period. Calculate the following (Express BOTH answers with NO commas, rounded to TWO decimal places): Dirty Price of bond = $ Accrued Interest = $ Upload a picture of your work: Please select file(s) Select file(s) Q2 Bond pricing practice 10 Points Q2.1 Bond Pricing 2 Points Consider a bond with an original term to maturity of 5 years, 7% coupon (paid semi-annually), 5% yield-to-maturity, $1000 face value. Suppose that the 4th coupon payment on this bond was just paid, so there are now exactly 3 years until maturity. Calculate the price of the bond today (Express your answer with NO commas, rounded to TWO decimal places): Bond Price = $ Upload a picture of your work to show your calculations: Please select file(s) Select file(s) Save Answer Q2.2 Bond Duration 2 Points Consider the same bonda as the previous question, with an original term to maturity of 5 years, 7% coupon (paid semi-annually), 5% yield-to-maturity, $1000 face value. As before, suppose that the 4th coupon payment on this bond was just paid, so there are now exactly 3 years until maturity. Calculate the Modified Duration of the bond today (Express your rounded to TWO decimal places): Modified Duration of bond = Upload a picture of your work to show your calculations or, if you used Excel, upload your Excel file: Please select file(s) Select file(s) Formula for Macaulay Duration (with semi-annual coupons): t=1 1 1/2 Dmac P CF (1 + 1/2)" Q2.4 Bond price observation 2 Points If your calculations are correct in the previous question, then you should be able to calculate the "clean" price of the bond by subtracting your calculated accrued interest from your calculated dirty price (Clean Price = Dirty Price - Accrued Interest). Is your calculated clean price of the bond higher or lower than the price at the last coupon date? Do you have any explanation for the difference? [Try to keep your response at 3 sentences or less.] Save Answer