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In November 2017, Treasury 4¾s of 2041 offered a semiannually
compounded yield to maturity of 2.6%. Recognizing that coupons are paid semiannually,
calculate the
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- Smashing Cantaloupes Inc. issued 5-year bonds with a par value of $35,000 and an 8% semiannual coupon (payable June 30 and December 31) on January 1, 2018, when the market rate of interest was 10%. Were the bonds issued at a discount or premium? Assuming the bonds sold at 92.288, what was the sales price of the bonds?In February 2015 Treasury 3 5/8s of 2035 offered a semiannually compounded yield to maturity of 2.98%. Recognizing that coupons are paid semiannually, calculate the bond's price. Assume face value is $1,000.A bond that has a face value of $3,000 and coupon rate of 3.40% payable semi-annually was redeemable on July 1, 2021. Calculate the purchase price of the bond on February 10, 2015 when the yield was 3.65% compounded semi-annually.
- A bond that has a face value of $2,000 and coupon rate of 3.60% payable semi-annually was redeemable on July 1, 2021. Calculate the purchase price of the bond on February 10, 2015 when the yield was 4.10% compounded semi-annually. Round to the nearest centIn November 2017 treasury 41/2s of 2044 offered a semiannually compaunded yiedl to maturity of 2.66%. Recognizing that coupons are paid semiannually, calculate the bond's price. Assume face value is $1,000.In January 2016, Anheuser-Busch issued an outstanding bond that pays a 3.4% coupon rate, matures in January 2023, and has a yield to maturity of 2.92%. In January 2017, Santander Holdings issued an outstanding bond that pays a 3.574% coupon rate, matures in January 2023, and has a yield to maturity of 3.344%. a. Does the Anheuser-Busch bond sell at a premium, at par, or at a discount? How do you know? What about the Santander bond? b. Which bond would you guess has a higher rating? Why? c. Can you draw any conclusion about the shape of the yield curve, either now or when these bonds were first issued, from the information given in the problem? Why or why not?
- Consider a zero-coupon bond issued on 1st of March 2017 with maturity in two years and face value £100.If the bond is issued at a price of £90 and pays capital gains tax at 25%,find the net redemption yieldConsider a zero-coupon bond issued on 1st of March 2017 with maturity in two years and face value £100 (a) Compute the price on the 1st of March 2017 if the gross yield is 4% p.a. effective. (b) If the bond is issued at a price of £90 and pays capital gains tax at 25%, find the net redemption yield.Assume that it is February 15, 2012 and there are exactly 8 six-month time periods remaining until maturity for a 30-year US Treasury bond that was originally issued on February 15, 1986. This bond has a coupon rate of 9.25%. The coupons are paid semi-annually. The bond matures on February 15, 2016. The yield to maturity is 0.754%. The bond was sold in face value increments of $100. Using the PVA formula, what is the current price of the bond? Is this bond priced at a premium, at a discount, or at par? Why? Begin with the general formula. Show all your work. PV= $133.41
- On 01st Jan 2017, ABC Company issued A 5-year bond with a principal of $100 000, annual coupons of 5% p.a., and a call provision on 01 Jan 2020 at the price of $96.38. Given that the yield is 6% p.a. on 01st Jan 2020, would the ABC Company exercise the call provision to buy back the bond at $96.38? Explain why.On 31st March 2016 you saw the following information about bonds. Name of Security Face Value Maturity Date Coupon Rate Coupon Date(s) Zero Coupon 10,000 31st March 2026 N.A. N.A. t-Bill 1,00,000 24th June 2016 N.A. N.A. 10.71%GOTT 2026 100 31st March 2026 10.71 31st March 10%GOTT 2021 100 31st March 2021 10 31st March & 31st October 1B) What will be the annualized % yield of the treasury bill of face value which is currently traded at 98,000?In 2016, AT&T issued 10-year bonds with a coupon that pays $93.75 annually. At the time of issue, the bonds sold at par. Today, bonds of similar risk and maturity must pay an annual coupon of 7.25% to sell at par value. Assuming semi-annual payments and a 7.25% yield to maturity, what is the current price of the firm’s bonds?
