Question: Please help! (25 points) 2. On October 30, 2021 you purchased a $10,000 T-note that matures on November 1, 2031. Settlement occurs one day after
(25 points) 2. On October 30, 2021 you purchased a $10,000 T-note that matures on November 1, 2031. Settlement occurs one day after purchase, so you receive actual ownership of the bond on November 1, 2021, thus the T-note has exactly 10-years to maturity on the settlement date; where, the next coupon payment will be on May 1, 2022. The coupon rate on the T-note is 1.40% and the market determined YTM is 1.45%. a. Since the bond pays interest semi-annually, what is the bond's price (both clean and dirty) on 11/1/21, the settlement date? Ya=(Annual Coupon rate/2) {[1-((1 + Annual YTM/2)2(1Annual YTM/2} +1(1 + Annual YTM/2)2(10) Show that Excel Function: -PRICE (settlement maturity.rateyld, redemption frequence.basis) results in the same price. Copy and paste Excel output here b. Two months later, (January 1, 2022), what is the dirty and clean price of the T-note if the market yield (YTM) on the T-note increases to 1.5%? Remember, you have held the bond for 61 days or 0.17123 years and the T-note has 9.83288 years or 19.66575 semi-annual periods remaining to maturity. (assume there are 184 days during each semi-annual period). Clean Price Ya- Excel Determined Price: Copy and Paste Excel output here c. What is the accrued interest on the T-Note given that you have held it for 61 days? (Assume there are 184 days during each semi-annual period). Acerued interest over the 61 days is calculated as: d. Given that Clean price Accrued interest - Dirty price, what is the Dirty price in both percent and in dollar price of the T-note on January 1, 2022? Or $10,000 face value Dollar price=S (25 points) 2. On October 30, 2021 you purchased a $10,000 T-note that matures on November 1, 2031. Settlement occurs one day after purchase, so you receive actual ownership of the bond on November 1, 2021, thus the T-note has exactly 10-years to maturity on the settlement date; where, the next coupon payment will be on May 1, 2022. The coupon rate on the T-note is 1.40% and the market determined YTM is 1.45%. a. Since the bond pays interest semi-annually, what is the bond's price (both clean and dirty) on 11/1/21, the settlement date? Ya=(Annual Coupon rate/2) {[1-((1 + Annual YTM/2)2(1Annual YTM/2} +1(1 + Annual YTM/2)2(10) Show that Excel Function: -PRICE (settlement maturity.rateyld, redemption frequence.basis) results in the same price. Copy and paste Excel output here b. Two months later, (January 1, 2022), what is the dirty and clean price of the T-note if the market yield (YTM) on the T-note increases to 1.5%? Remember, you have held the bond for 61 days or 0.17123 years and the T-note has 9.83288 years or 19.66575 semi-annual periods remaining to maturity. (assume there are 184 days during each semi-annual period). Clean Price Ya- Excel Determined Price: Copy and Paste Excel output here c. What is the accrued interest on the T-Note given that you have held it for 61 days? (Assume there are 184 days during each semi-annual period). Acerued interest over the 61 days is calculated as: d. Given that Clean price Accrued interest - Dirty price, what is the Dirty price in both percent and in dollar price of the T-note on January 1, 2022? Or $10,000 face value Dollar price=S
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