Please check if 6 is right and if not correct 5 Compute the value of a bond with a typical $1000 par value, a coupon rate of 2 25 with semi annual payments, and a 30 year maturity if investors required a yield to maturity of 1 08 on the bond (or 108 basis points) 1000 0 225 1 2 $11 25 0 0108 1 2 0 0054 ( PV(rate,nper,pmt,fv)) ( PV(0 0054,60,11 25,1000)) $1,299 13 6 Compute the value of the bond in b 5 if investors suddenly required a yield to maturity of 0 036 on the bond (or 360 basis points) 1000 0 225 1 2 $11 25 0 036 1 2 0 00018 ( PV(rate,nper,pmt,fv)) ( PV(0 00018,60,11 25,1000)) 1,660 57

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Question: Please check if 6 is right and if not correct. 5. Compute the value of a bond with a typical $1000 par value, a coupon

Please check if 6 is right and if not correct.

5. Compute the value of a bond with a typical $1000 par value, a coupon rate of 2.25% with semi-annual payments, and a 30-year maturity if investors required a yield to maturity of 1.08% on the bond (or 108 basis points).

1000*0.225*1/2 = $11.25
0.0108*1/2 = 0.0054
(-PV(rate,nper,pmt,fv))
(-PV(0.0054,60,11.25,1000))
= $1,299.13

6. Compute the value of the bond in b.5 if investors suddenly required a yield to maturity of 0.036% on the bond (or 360 basis points).

1000*0.225*1/2 = $11.25
0.036*1/2= 0.00018
(-PV(rate,nper,pmt,fv))
(-PV(0.00018,60,11.25,1000))
= 1,660.57

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