Question: A bond ETF named TEX, comprises four bonds ( face value = $ 1 0 0 0 ) : 1 ) There are 5 0

A bond ETF named TEX, comprises four bonds (face value=$1000):
1) There are 50 bonds with semi-annual payments, 5-year maturity, 4% annual coupon rate.
2) There are 100 bonds with annual payments, 30-year maturity, 8% annual coupon rate.
3) There are 150 zero coupon bond with 10-year maturity.
4) There are 200 zero coupon bond with 20-year maturity.
1. To investor A, if his/her required yield is 6% per year, what is the present value for each bond? (20% credit)
2. To investor A, what is the fair value of the entire TEX portfolio given these bonds present values from question 1? What is each bonds market value weight in the portfolio? (20% credit)
3. To investor B, if his/her required yield is 10% per year, what is the present value for each bond? What is the fair value of the entire TEX portfolio given these bonds present values? What is each bonds market value weight in the portfolio? (20% credit)
4. To investor A, which are premium bonds and which are discount bonds? If these bonds yield to maturity remain constant (which means market interest rate remains constant), then in one year will each bonds price be higher, lower, or unchanged? (20% credit)
5. To investor A and focusing on the first bond with semi-annual payments, if the last interest payment was made 60 days ago, what is the bonds accrued interest and invoice price if the clean price is the present value of the bond? Assuming 180 days between two coupon payments. (10% credit)
6. To investor B and focusing on the second bond with annual payments, if the last interest payment was made 90 days ago, what is the bonds accrued interest and invoice price if the clean price is the present value of the bond? Assuming 360 days between two coupon payments (10% credit).

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