Question: Consider the four bonds listed in Table 1 below. For each bond, you are given four variables and are asked to calculate the fifth (missing)
Consider the four bonds listed in Table 1 below. For each bond, you are given four variables and are asked to calculate the fifth (missing) variable. Use the information in Table 1 to answer the next four questions on the exam.
| Table 1: List of Bonds | ||||
|
| Bond A | Bond B | Bond C | Bond D |
| Number of years to maturity |
| 4.5 | 4 | 6 |
| Face Value ($) | 1,000.00 | 1,000.00 | 1,000.00 | 1,000.00 |
| Semi-annual Coupon Payment ($). The amounts shown are payments per 6 months | 37.00 |
| 35.00 | 40.00 |
| Yield to Maturity (Annualized) | 8.6% | 6.0% |
| 7.0% |
| Bond Price ($) | 886.37 | 922.10 | 891.36 |
|
A. What is the number of YEARS to maturity for Bond A?
B. What is the Semi-Annual Coupon Payment ($) for Bond B?
C. What is the Yield to Maturity (YTM) for Bond C? Note: Remember that YTM is always quoted as an annualized number. Also, enter the answer as a percent, not as a decimal.
D. What is the Bond Price ($) for Bond D?
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
