8/7/2019 Evaluation of Bonds

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Question 01

Present Value of the coupons 752.315

Present Value of the face / par value 97.222

Bond Value 849.537

Expected Annual Yield (EAY) 12.36%

Question 02

Present Value of the coupons 354.530

Present Value of the face / par value 556.837

Bond Value 911.367

Expected Annual Yield (EAY) 10.25%

Question 03

Yes

No

10%

8%

Question 04Status

Rate Increase

Bond Value Decrease

Question 05

Present Value of the coupons 449.236

Present Value of the face / par value 422.411

Bond Value 871.647

Question 06

Rate 8.76%

Question 07

Value of coupon paid per period 55.64

Yield per period 5.564%Question 08

Present Value of the coupons 636.516

Present Value of the face / par value 444.899

Bond Value 1081.415

Question 09

Yield to Maturity (YTM) 6.69%

compounded semiannually

Question 10

Coupon Rate 7.1276%

compounded semiannually

Question 11

0.14

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Question 12

R (Nominal Rate of Return) 6.605%

Question 13

6.61%

Question 14

r (Real Rate of Return) 8.6538%

Question 15

Bond X value after 1 year 1158.85

Bond Y value after 1 year 856.79

Bond X value after 3 year 1140.47

Bond Y value after 3 year 871.65

Bond X value after 8 year 1082.00

Bond Y value after 8 year 922.21

Bond X value after 12 year 1018.69

Bond Y value after 12 year 981.65

Bond X value after 13 year 1000

Bond Y value after 13 year 1000

Question 16

a

Bond Bob Value 1000

Bond Tom Value 1000

b

Interest Rates rises by 2%Bond Bob Value

Present Value of the coupon 141.84

Present Value of the Face/Par Valu 822.7

Bond Value 964.54

Bond Tom Value

Present Value of the coupon 614.9

Present Value of the Face/Par Valu 231.38

Bond Value 846.28

Percentage change in prices of bond

Bond Bob Value -3.546%Bond Tom Value -15.372%

c

Interest Rates falls by 2%

Bond Bob Value

Present Value of the coupon 148.68

Present Value of the Face/Par Valu 888.49

Bond Value 1037.17

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Bond Tom Value

Present Value of the coupon 784.02

Present Value of the Face/Par Valu 411.99

Bond Value 1196

Percentage change in prices of bond

Bond Bob Value 3.717%

Bond Tom Value 19.6%

Question 17

Bond Bob Valuen j 825.22

Bond Tom Value k 1174.78

Interest Rates rises by 2%

Bond jValue

Present Value of the coupon 270.95

Present Value of the Face/Par Valu 458.11

Bond Value 729.06

Bond k Value

Present Value of the coupon 596.08

Present Value of the Face/Par Valu 458.11

Bond Value 1054.19

Percentage change in prices of bond

Bond j Value -11.65%

Bond k Value -10.26%

Interest Rates falls by 2%

Bond j Value

Present Value of the coupon 314.03

Present Value of the Face/Par Valu 623.17

Bond Value 937.19

Bond k Value

Present Value of the coupon 690.86

Present Value of the Face/Par Valu 623.17

Bond Value 1314.03

Percentage change in prices of bond

Bond j Value 14%

Bond k Value 11.85%

Question 18

APV PMT RATE N

1040 100 ### 14

EFFECTIVE RAT ###

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Question 19

APV PMT RATE N

1095 40 ### 20

20 semi annu 6.6823%

Question 21

APV PMT RATE N

1200 98 9% 12.99

Question 22

FV PV RATE N

(a) 1000 ($178.43) 9% 20

FV RS PON BOUND

(b) 1000 10000000 10000

FV PV RATE N

-1000 $75.37 9% 30

ZERO COUPONBONDS

$132,676.78TOTAL

$132,676,784.69