A 15-year maturity, 9% coupon bond paying coupons semiannually is callable in 5
ID: 2642890 • Letter: A
Question
A 15-year maturity, 9% coupon bond paying coupons semiannually is callable in 5 years at a call price of $1,080. The bond currently sells at a yield to maturity of 7% (3.5% per half-year).
What is the yield to call annually? (Do not round intermediate calculations. Round your answer to 3 decimal places. Omit the "%" sign in your response.)
What is the yield to call annually if the call price is only $1,030? (Do not round intermediate calculations. Round your answer to 3 decimal places. Omit the "%" sign in your response.)
What is the yield to call annually if the call price is $1,080, but the bond can be called in 2 years instead of 5 years? (Do not round intermediate calculations. Round your answer to 3 decimal places. Omit the "%" sign in your response.)
A 15-year maturity, 9% coupon bond paying coupons semiannually is callable in 5 years at a call price of $1,080. The bond currently sells at a yield to maturity of 7% (3.5% per half-year).
Explanation / Answer
A 15-year maturity, 9% coupon bond paying coupons semiannually is callable in 5 years at a call price of $1,080. The bond currently sells at a yield to maturity of 7% (3.5% per half-year).
What is the yield to call annually? (Do not round intermediate calculations. Round your answer to 3 decimal places. Omit the "%" sign in your response.)
Current Price = pv(rate,nper,pmt,fv)
Current Price = pv(3.5%,30,45,1000)
Current Price = 1183.92
Yield to call = rate(nper,pmt,pv,fv) * 2
Yield to call = rate(10,45,-1183.92,1080)*2
Yield to call = 6.073%
What is the yield to call annually if the call price is only $1,030? (Do not round intermediate calculations. Round your answer to 3 decimal places. Omit the "%" sign in your response.)
Current Price = pv(rate,nper,pmt,fv)
Current Price = pv(3.5%,30,45,1000)
Current Price = 1183.92
Yield to call = rate(nper,pmt,pv,fv) * 2
Yield to call = rate(10,45,-1183.92,1030)*2
Yield to call = 5.297%
What is the yield to call annually if the call price is $1,080, but the bond can be called in 2 years instead of 5 years? (Do not round intermediate calculations. Round your answer to 3 decimal places. Omit the "%" sign in your response.)
Current Price = pv(rate,nper,pmt,fv)
Current Price = pv(3.5%,30,45,1000)
Current Price = 1183.92
Yield to call = rate(nper,pmt,pv,fv) * 2
Yield to call = rate(4,45,-1183.92,1080)*2
Yield to call = 3.321%
A 15-year maturity, 9% coupon bond paying coupons semiannually is callable in 5 years at a call price of $1,080. The bond currently sells at a yield to maturity of 7% (3.5% per half-year).
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