Backwater Corp. has 8 percent coupon bonds making annual payments with a YTM of

Question

Backwater Corp. has 8 percent coupon bonds making annual payments with a YTM of 7.3 percent. The current yield on these bonds is 7.65 percent. How many years do these bonds have left until they mature? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Maturity of bond years references ebook & resources value Roadside Markets has a 6.75 percent coupon bond outstanding that matures in 10.5 years. The bond pays interest semiannually. What is the market price per bond if the face value is $1.000 and the yield to maturity is 7.2 percent? value: A bond that pays interest annually yields a rate of return of 775 percent. The inflation rate for the same period is 4 percent. What is the real rate of return on this bond? value Redesigned Computers has 6.5 percent coupon bonds outstanding with a current market price of $832. The yield to maturity is 16.28 percent and the face value is $1.000. Interest is paid semiannually. How many years is it until these bonds mature?

Explanation / Answer

Hi,

Please find the detailed answer as follows:

Part A:

Number of Years = Nper(Rate,PMT,PV,FV)/2 = Nper(16.28%/2,32.50,-832,1000)/2 = 2.10 Years

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Part B:

Real Rate = (1+7.75%)/(1+4%) -1 = 3.61%

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Part C:

Market Price = PV(Rate,Nper,PMT,FV) = PV(7.2%/2,21,33.75,1000) = $967.24

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Part D:

Current Price = (1000*8%)/7.65% = 1045.75

Number of Years = Nper(Rate,PMT,PV,FV) = Nper(7.30%,40, -1045.75,1000) = 9.20 Years

Thanks.

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