$1)$ Walmart Problem $(20$ points$)$

On August $10,2022,$ Walmart issued the following bonds: Walmart issued three series of bonds:

$$ $$2$ billion of $2\mathrm{.}95\%$ Bonds due $2027(5$ year maturity$)$

$$ $$1$ billion of $4\mathrm{.}20\%$ Bonds due $2032(10$ year maturity$)$

$$ $$750$ million of $5\mathrm{.}20\%$ Bonds due $2052(30$ year maturity$)$

$$ The WMT bonds issued had a face value of $$1,000$

a$.$ What is the value of each of Walmart$$s $4\mathrm{.}20\%2032$ bonds at issuance if the yield to maturity is $4\mathrm{.}20\%?$

b$.$ Suppose that one year after Walmart issues its bonds, the market rate for similar bonds has risen to $5\%.$ What is value of each of Walmart$$s $4\mathrm{.}20\%2032$ bond?

c$.$ Suppose that two years after Walmart issues its bonds, the market yield to maturity for similar bonds has fallen to $1\%.$ What is value of each of Walmart$$s $4\mathrm{.}20\%2032$ bond?

$2)$ What is the Coupon Rate on a $$1000$ par value bond due in $10$ years trading at $$950\mathrm{.}00$ and the current YTM is $3\%.$ Assume the bond pays semi$-$annual payments. $(10$ points$)$

$3)$ You purchase a bond with an invoice price of $$968.$ The bond has a coupon rate of $7\mathrm{.}4$ percent, and there are four months to the next semiannual coupon date. What is the clean price of the bond? i$.$e$.$ How much will the bond be quoted as in the market? $(10$ points$)$

$4)$ What is the price of a four$-$year, $$1,000$ par, $5\%$ annual coupon bond if the market interest rate is $6\%?($The bond pays interest annually$).$ Is this bond selling at a premium or discount? $(10$ points$)$

$5)$ ABW Inc. issued $11-$year bonds four years ago at a coupon rate of $6\mathrm{.}9\%.$ The bonds make semi$-$annual payments. If the YTM on these bonds is $7\mathrm{.}4\%,$ what is the current bond price? $(10$ points$)$

$6)$ You wish to purchase a $20-$year bond that has a maturity value of $$1000$ and makes semi$-$annual interest payments of $$40.$ If you require a $6\%$ yield to maturity on this investment, what is the maximum price you would pay for the bond? Would the bond be considered a premium or discount at this price? $(10$ points$)$

$7)$ You can purchase a $$1000$ face value bond with $15$ years to maturity for $$1124.$ The bond pays a semi$-$annual coupon. The market requires a return of $8\%$ on similar bonds. What is the coupon rate? $(10$ points$)$

$8)$ Fabozzi, $10$th edition, Chapter $3,$ Problem #$2(20$ points$)$

a$.$ The portfolio manager of a tax$-$exempt fund is considering investing $$500,000$ in a debt instrument that pays an annual interest rate of $5\mathrm{.}7\%$ for four years. At the end of four years, the portfolio manager plans to reinvest the proceeds for three more years and expects that for the three$-$year period, an annual interest rate of $7\mathrm{.}2\%$ can be earned. What is the future value of this investment?

b$.$ Suppose that the portfolio manager in Question $3,$ part a$,$ has the opportunity to invest the $$500,000$ for seven years in a debt obligation that promises to pay an annual interest rate of $6\mathrm{.}1\%$ compounded semiannually. Is this investment alternative more attractive than the one in Question $3,$ part a$?$

$9)$ Fabozzi, $10$th edition, Chapter $2,$ Problem #$11(10$ points$)$ Suppose that you are reviewing a price sheet for bonds and see the following prices $($per $$100$ par value$)$ reported. You observe what seem to be several errors. Without calculating the price of each bond, indicate which bonds seem to be reported incorrectly, and explain why.

Bond Price Coupon Rate $(\%)$ Required Yield $(\%)$

U $9069$

V $9698$

W $11086$

X $10505$

Y $10779$

Z $10066$