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A) A $1,000 par value bond bearing a 5% coupon rate payable semi-annually will be redeemed at 108% at the end of 7 years. Find the price to yield an investor 6% convertible semi-annually. (Round answer to nearest cent.)

B) After 5 years (immediately after the 10th coupon is paid), Andrew decides to sell a 20 year bond with a par value of $10,000 that willmature for $10,500. The coupon rate is 8% convertible semiannually. Interest rates have changed such that the price of the bond at the time ofthe sale is priced using a yield rate of  10% convertible semiannually. Calculate the selling price. (Round answer to nearest cent.)

C) A 30-year  bond  with  a  par  value  of $1,000  and  10%  coupons  payable  quarterly is selling  at $850. Calculate  the  annual  nominal  yield  rate convertible  quarterly. (Provide answer as a percent rounded to 1 decimal place.)

D) A 10 year bond with a par value of 100,000 and semi-annual coupons 2500 is bought at a discount to yield 6% convertible semi-annually. (Round answers to nearest cent.)

i. Calculate the book value immediately after the 9th coupon. Blank 1

ii. Using the theoretical method, calculate the flat price 2 months after the 9th coupon. Blank 2

iii. Using the theoretical method, calculate the accrued interest 2 months after the 9th coupon. Blank 3

iv. Using the theoretical method, calculate the market price 2 months after the 9th coupon. Blank 4

v. Using the practical method, calculate the flat price 2 months after the 9th coupon. Blank 5

vi. Using the practical method, calculate the accrued interest 2 months after the 9th coupon Blank 6

vii. Using the practical method, calculate the market price 2 months after the 9th coupon. Blank 7  

viii. Using the semi-theoretical method, calculate the flat price 2 months after the 9th coupon. Blank 8

ix. Using the semi-theoretical , calculate the accrued interest 2 months after the 9th coupon Blank 9

x. Using the semi-theoretical , calculate the market price 2 months after the 9th coupon.

E) A $1000 par value 6% bond with semiannual coupons matures at the end of 10 years. The bond is callable at $1050 at the ends of years 4 through6, at $1025 at the ends of years 7 through 9, and at $1000 at the end of year 10. Find the maximum price that an investor can pay and still becertain of a yield rate of 4 % convertible semiannually.

i) Price if called in the window of ends of years 4 through 6:  Blank 1

ii) Price if called in the window of ends of years 7 through 9:  Blank 2

iii) Price if called at maturity (end of year 10):  Blank 3

iv) Maximum price that an investor can pay and still be certain of a yield rate of 4% convertible semiannually.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92744091

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