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This needs to be done in Excel (formulas). Also I need a summary of the question (your thoughts).

A. Consider a bond with a settlement date of 12/12/1990. The bond has a face value of $100. The maturity of the bond is March 15, 2014. The coupon rate is 5.5%. If the yield to maturity of the bond is 5.34% (bond equivalent yield, semi annual compounding), what is the list price of the bond on the settlement date? What is the accrued interest on the bond? What is the invoice price of the bond?

 

B. Now suppose that the bond in the previous question is selling for $102. What is the bond’s yield to maturity? What would the yield to maturity be at a price of $102, if the bond paid its coupon only once a year?

Financial Management, Finance

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