Reference no: EM131851277
1. Compute Bond Price
Compute the price of a 6.3 percent coupon bond with 15 years left to maturity and a market interest rate of 10.4 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Bond price =
2. Bond Prices and Interest Rate Changes
A 6.20 percent coupon bond with 10 years left to maturity is priced to offer a yield to maturity of 7.4 percent. You believe that in one year, the yield to maturity will be 7.0 percent. What is the change in price the bond will experience in dollars? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Change in bond price=
3. Comparing Bond Yields
A client in the 35 percent marginal tax bracket is comparing a municipal bond that offers a 4.80 percent yield to maturity and a similar-risk corporate bond that offers a 6.60 percent yield.
Determine the equivalent taxable yield. (Round your answer to 2 decimal places.)
Equivalent taxable yield= %
4. TIPS Total Return
Consider a 5.30 percent TIPS with an issue CPI reference of 207.2. The bond is purchased at the beginning of the year (after the interest payment), when the CPI was 215.1. For the interest payment in the middle of the year, the CPI was 216.7. Now, at the end of the year, the CPI is 221.2 and the interest payment has been made.
What is the total return of the TIPS in dollars? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Total return=
What is the total return of the TIPS in percentage? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Total return= %