259 words - 2 pages

1.Calculate Invoice price for bond maturing Nov. 15, 2012 (in Excel). Assume today’s date is 1/15/2009

2. Find the duration of a 6% coupon bond making annual coupon payments if it has three years until maturity and a yield to maturity of 10%.

3. A) A zero-coupon bond with face value $1,000 and maturity of 6 years sells for ...view middle of the document...

99?

4. Why do bond prices go down when interest rates go up? Don’t investors like high interest rates?

5. A) ABC bond has a 3.5 coupon and 9 years till maturity. Yield to maturity is 2%. If you want to sell this bond what will be the flat price of this bond?

B) A bond has a current yield of _________?

C) What is the invoice price of this bond if the last interest (coupon) payment was made two months ago? The coupon period has 182 days.

6. A 4.25 coupon bond with maturity of 6 years sells for 113.5. What is the YTM?

7. A callable bond has a par value of $1,000, a time to maturity of 10 years, and a coupon rate of 8% with interest paid annually. Bond is callable in 3 years at a call price of $1100.

A) If the current market price is 114 percent of the par value, what is the YTM?

B) What is the yield to call?

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