Homework 4_Bank Management

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5. Chapter MC, Section 87, Problem 087 Algo Moerdyk Corporation's bonds have a 15-year maturity, a 10.15% semiannual coupon, and a par value of $1,000. The going interest rate (ra) is 7.90%, based on semiannual compounding. What is the band's price? a. $1,193.77 b. $1,195.72 c. $1,262.83 d. $1,230.60 e. $1,125.52

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Y8 Here are data on $1,000 par value bonds issued by Caterpillar and Intel. Assume you are thinking about buying these bonds. CaterpillarIntelCoupon5%4%Years to Maturity810Required Return4%5% Answer the following questions: a)     Assuming interest is paid annually, calculate the values of each of the bonds b)     How would these values change if the coupon was paid semiannually ( c)     Assume that the bonds with the coupon that is paid annually (point a) are selling for the following amounts: ·       Caterpillar $1,050 ·       Intel $980 What are the expected rates of return (YTM) for each bond? d)     How would change the price of each bond if the required rate of return (current 4% for Caterpillar and 5% for the Intel and with annual coupon) increased by 2%  What will you deduce about the relationship between market interest rate and bond prices? .

31. Bond ratings (S3.6) A bond's credit rating provides a guide to its price. In December 2020, Aaa bonds yielded 1.29% and Baa bonds yielded 3.11%. If some bad news causes a 10% five-year bond to be unexpectedly downrated from Aaa to Baa, what would be the likely effect on the bond price? (Assume annual coupons.)

(Related to Checkpoint​ 9.4)  ​(Bond valuation) A bond that matures in 8 years has a ​$1,000 par value. The annual coupon interest rate is 13 percent and the​ market's required yield to maturity on a​ comparable-risk bond is 16 percent. What would be the value of this bond if it paid interest​ annually? What would be the value of this bond if it paid interest​ semiannually?       Question content area bottom Part 1 a.  The value of this bond if it paid interest annually would be ​$enter your response here. ​(Round to the nearest​ cent.) Part 2 b.  The value of this bond if it paid interest semiannually would be ​$enter your response here. ​(Round to the nearest​ cent.)

28. Dry Seal plans to issue bonds to expand operations. The bonds will have a par value of P1,000, a 10-year maturity, and a coupon interest rate of 9%, paid semiannually. Current market conditions are such that the bonds will be sold to net P937.79. What is the yield-to-maturity of these bonds? a. 10% b. 9% c. 11% d. 8%

6. [HW] $100,000 bond redeemable at par on October 1, 2038, is purchased on January 15, 2017. Interest is 5.9% payable semi-annually and the yield is 9% compounded semi- annually. a) What is the cash price of the bond? b) What is the accrued interest? c) What is the purchase price? SDT : CPN = RDT = RV = АСT 2/Y YLD = PRI = Al = a) $70,634.65 b) $1718.13 c) 72,352.78

​(Related to Checkpoint​ 9.3)  ​(Bond valuation) Doisneau 22​-year bonds have an annual coupon interest of 8 ​percent, make interest payments on a semiannual​ basis, and have a ​$1,000 par value. If the bonds are trading with a​ market's required yield to maturity of 16 ​percent, are these premium or discount​ bonds? Explain your answer. What is the price of the​ bonds?       Question content area bottom Part 1 a. If the bonds are trading with a yield to maturity of 16​%, then ​ (Select the best choice​ below.)     A. the bonds should be selling at a premium because the​ bond's coupon rate is greater than the yield to maturity of similar bonds.   B. there is not enough information to judge the value of the bonds.   C. the bonds should be selling at par because the​ bond's coupon rate is equal to the yield to maturity of similar bonds.   D. the bonds should be selling at a discount because the​ bond's coupon rate is less than the yield to maturity of similar…

Answer ASAP accurately

2:37 a. Compute the bond's yield to maturity. b. Determine the value of the bond to you, given your required rate of return. c. Should you purchase the bond? (Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation) Fingen's 14-year, $1,000 par value bonds pay 9 percent interest annually. The market price of the bonds is $850 and the market's required yield to maturity on a comparable-risk bond is 13 percent. a. What is your yield to maturity on the Fingen bonds given the market price of the bonds? % (Round to two decimal places.) ||| Vo) 1 LTE2 = O 4Gl 41%

7. Riverside Metals recently issued some debt that had an original maturity of nine months. This debt is best elassified as a(n): A. option contract. B. money market instrument. C. fixed-income security. D. derivative security. E. futures contract. Use the following bond quotes to answer this question: Issuer Name Alpha Industrial Beta Movers Coupon 5.875 Change +.008 May 2036 103.407 100.013 103.354 +.010 Maturity High Low Last 99.402 Apr 2010 99 823 98.667 7.120 8. What is the current price of a S1,000 face value Beta Movers' bond? A. S1,000,10 B. S1,000.13 C. SI,033.54 D. $1,033.64 E. S1,034.17 9. Which one of the following represents a residual ownership interest in the issuer? A. U.S. Treasury bond B. corporate bond C. municipal bond D. preferred stock E. common stock Use these option quotes to answer this question: Chg Bid Ask Vol Open Int Strike Symbol Last 47.50 JLHW.X 6.00 to.25 5.90 6.10 18 12 50.00 JLHJ.X 4.75 t0.30 4.80 5.00 17 14 10. The price you will pay (per underlying…

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You are analyzing the cost of debt for a firm. You know that the firm's 14-year maturity, 8.6 percent coupon bonds are selling at a price of $832.00. The bonds pay interest semiannually. If these bonds are the only debt outstanding, answer the following questions. Problem 13.17 a1-a2(a1) Your answer is incorrect. What is the current YTM of the bonds? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to O decimal places, e.g. 15%.) Current YTM for the bonds %

​(Related to Checkpoint​ 9.3)  ​(Bond valuation) Doisneau 18​-year bonds have an annual coupon interest of 14 ​percent, make interest payments on a semiannual​ basis, and have a ​$1,000 par value. If the bonds are trading with a​ market's required yield to maturity of 16 ​percent, are these premium or discount​ bonds? Explain your answer. What is the price of the​ bonds?       Question content area bottom Part 1 a. If the bonds are trading with a yield to maturity of 16​%, then ​ (Select the best choice​ below.)     A. the bonds should be selling at a discount because the​ bond's coupon rate is less than the yield to maturity of similar bonds.   B. there is not enough information to judge the value of the bonds.   C. the bonds should be selling at a premium because the​ bond's coupon rate is greater than the yield to maturity of similar bonds.   D. the bonds should be selling at par because the​ bond's coupon rate is equal to the yield to maturity of similar…

2:36 Vol) 1 LTE2 (Related to Checkpoint 9.3) (Bond valuation) Doisneau 18-year bonds have an annual coupon interest of 13 percent, make interest payments on a semiannual basis, and have a $1,000 par value. If the bonds are trading with a market's required yield to maturity of 16 percent, are these premium or discount bonds? Explain your answer. What is the price of the bonds? a. If the bonds are trading with a yield to maturity of 16%, then (Select the best choice below.) 4Gl ||| O A. the bonds should be selling at a discount because the bond's coupon rate is less than the yield to maturity of similar bonds. = 41% O B. the bonds should be selling at a premium because the bond's coupon rate is greater than the yield to maturity of similar bonds. O C. there is not enough information to judge the value of the bonds. O D. the bonds should be selling at par because the bond's coupon rate is equal to the yield to maturity of similar bonds. O

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6. [HW] $100,000 bond redeemable at par on October 1, 2038, is purchased on January 15, 2017. Interest is 5.9% payable semi-annually and the yield is 9% compounded semi-annually. a) What is the cash price of the bond? b) What is the accrued interest? c) What is the purchase price? SDT = CPN = RDT = RV = ACT 2/Y YLD = PRI = AI =     a) $70,634.65 b) $1718.13 c) 72,352.78

2:37 (Related to Checkpoint 9.2) (Yield to maturity) Abner Corporation's bonds mature in 24 years and pay 12 percent interest annually. If you purchase the bonds for $850, what is your yield to maturity? Your yield to maturity on the Abner bonds is %. (Round to two decimal places.) ||| Vo) 1 [ 22 ... 46 ... LTE2 = O 41%

This is about stocks and bonds...no.1 only...

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11 (Related to Checkpoint 9.3) (Bond valuation) Doisneau 22-year bonds have an annual coupon 01 interest of 13 percent, make interest payments on a semiannual basis, and have a $1,000 par value. If 11 the bonds are trading with a market's required yield to maturity of 17 percent, are these premium or discount bonds? Explain your answer. What is the price of the bonds? 01 a. If the bonds are trading with a yield to maturity of 17%, then (Select the best choice below.) 11 O A. there is not enough information to judge the value of the bonds. O B. the bonds should be selling at par because the bond's coupon rate is equal to the yield to maturity of similar bonds. 11 O! O C. the bonds should be selling at a discount because the bond's coupon rate is less than the yield 11 to maturity of similar bonds. O D. the bonds should be selling at a premium because the bond's coupon rate is greater than the yield to maturity of similar bonds. 11 b. The price of the bonds is $. (Round to the nearest…

Answer problem 8.30(c)

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a. b. C. Problem 9.4: R & J, Inc. issues a 10-year $1,000 bond that pays $28.50 semi-annually. The market price for the bond is $975. The market's required yield to maturity on a comparable-risk bond is 6 percent. a. What is the value of the bond to you?. b. What happens to the value if the market's yield to maturity on a comparable-risk bond (i) increases to 8 percent or (ii) decreases to 4 percent? c. Under which of the circumstances in parts a & b should you purchase the bond? Years Par (FV) PMT Nper m Comparable risk (Rate) Bond value (PV) Comparable risk (Rate) Bond value (PV) Comparable risk (Rate) Bond value (PV)

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f10-year T-bonds have a yield of 6.2%, 10-year corporate bonds yield 9%, the maturity risk premium on all 10- ear bonds is 1.3%, and corporate bonds have a 0.4% liquidity premium versus a zero liquidity premium for T- Donds, what is the default risk premium on the corporate bond? Select the correct answer. O a. 2.64% O b. 2.16% Oc2.88% d. 2.40% e. 3.12%

H5. f. (1) What is the yield to maturity on a 10-year, 9% annual coupon, $1,000 par value bond that sells for $887.00? That sells for $1,134.20? What does the fact that a bond sells at a discount or at a premium tell you about the relationship between rd and the bond’s coupon rate? solve in Excel    Show proper step by step calculation and explain with details

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