Question D

2. You have decided to evaluate the following bonds to include in your portfolio: Settlement Date Maturity Date Frequency Face Value Coupon Rate Required Return Given Price Bond 1 | Bond 2 3/15/2012 9/1/2012 1/15/2022 7/1/2032 1 $1,000 | $1,000 7.00% 9% 9.00% 12% $900 $1100 Bond 3 7/15/2012 9/15/2042 2 $1,000 12% 14% $1000 A. Find the price of these bonds B. Determine the yield to call on these bonds if the time to first call and the call premium for each one of them are the following: Call Premium % Call Date Bond A | 2.00% 7/15/2015 Bond B Bond C 3.00% 4.00% 9/1/2017 | 1/15/2016 C. Determine the duration and modified duration of these bonds. D. Also find whether the bond is undervalued, overvalued, or fairly valued compared to the given price. Use a conditional statement for this. 2. You have decided to evaluate the following bonds to include in your portfolio: Settlement Date Maturity Date Frequency Face Value Coupon Rate Required Return Given Price Bond 1 | Bond 2 3/15/2012 9/1/2012 1/15/2022 7/1/2032 1 $1,000 | $1,000 7.00% 9% 9.00% 12% $900 $1100 Bond 3 7/15/2012 9/15/2042 2 $1,000 12% 14% $1000 A. Find the price of these bonds B. Determine the yield to call on these bonds if the time to first call and the call premium for each one of them are the following: Call Premium % Call Date Bond A | 2.00% 7/15/2015 Bond B Bond C 3.00% 4.00% 9/1/2017 | 1/15/2016 C. Determine the duration and modified duration of these bonds. D. Also find whether the bond is undervalued, overvalued, or fairly valued compared to the given price. Use a conditional statement for this