Reference no: EM131837475

Interest Payments  Determine the interest payment for the following three bonds: 5 ½ percent coupon corporate bond (paid semiannually), 5.25 percent coupon Treasury note, and a corporate zero coupon bond maturing in 10 years. (Assume a $1,000,000 par value.)

Call Premium   A 6.25 percent corporate coupon bond is callable in 7 years for a call premium of one year of coupon payments. Assuming a par value of $1,000, what is the price paid to the bondholder if the issuer calls the bond?

Bond Quotes   Consider the following three bond quotes; a Treasury note quoted at 107:27, and a corporate bond quoted at 102.75, and a municipal bond quoted at 102.95. If the Treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $10,000, what is the price of these three bonds in dollars?

Compute Bond Price   Compute the price of a 6.5 percent coupon bond with 20 years left to maturity and a market interest rate of 7 percent. (Assume interest payments are semiannual.) Is this a discount or premium bond?

Yields of a BondA 3.75 percent coupon municipal bond has 17 years left to maturity and has a price quote of 102.80. The bond can be called in eight years. The call premium is one year of coupon payments. Compute and discuss the bond’s current yield, yield to maturity, taxable equivalent yield (for an investor in the 30 percent marginal tax bracket), and yield to call. (Assume interest payments are semiannual and a par value of $10,000.)