the following information to answer the questions.   Bond A Bond B Face Value   1000 1000 Coupon rate   10%   8%   Coupons paid out   Semi-annually Quarterly Years to maturity   4 4 Bond price   800 ?   Suppose bond A and B have the same YTM. What is the yield to maturity of bond A?   What is the price of bond B?   What is the current yield of bond B?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 12P: Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may...
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Use the following information to answer the questions.

 

Bond A

Bond B

Face Value

 

1000

1000

Coupon rate

 

10%

 

8%

 

Coupons paid out

 

Semi-annually

Quarterly

Years to maturity

 

4

4

Bond price

 

800

?

 

Suppose bond A and B have the same YTM.

  1. What is the yield to maturity of bond A?

 

  1. What is the price of bond B?

 

  1. What is the current yield of bond B?

 

  1. What is the EAR (effective annual rate) of these two bonds?
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For Part 2, can that be calculated using excel?

 

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Can the price of bond B be determined using the PV function or any other function in excel? What is the EAR (effective annual rate) of these two bonds?

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