B D 2 Problem: 3 You are given the following data for two bonds with semiannual payments (A and B) 4 5 Bond A B 6 Settlement Date 2/15/2020 2/15/2020 7 Maturity Date 2/15/2040 2/15/2040 8 Coupon rate 4% 9 10 Similar bonds with 20 year to maturity sell for 4.5% coupon rates in the market. 11 Calculate the bond value for bond A and B 12 Calculate the YTM for bond A and B 8% B23 RU A B 14 Bond Valuation 15 Settlement Date 2/15/2020 16 Maturity Date 2/15/2040 17 Coupon rate 8% 18 Required return 4.50% 19 Redemption Value 100 20 Frequency 2 21 Basis 0 22 Calculate the PV of the bond in U.S. $ 23 a) Use the Price Function 24 B) Use the Yield Function 25 26 27 2/15/2020 2/15/2040 4% 4.50% 100 2 0 NNNN