Find out the yield to maturity of the bonds

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Problem 1: Springfield Nuclear Energy Inc. bonds are currently trading at $1,449.44. the bonds have a face value of $1,000, a coupon rate of 10.5% with coupons paid annually, and they mature in 10 years. What is the yield to maturity of the bonds?

Problem 2: Consider an annual bond with a face value of $100, 10 years to maturity, and a price of $81. The coupon rate on the bond is 6%. If you can invest coupons at a rate of 4.55 per annum, then how much money do you have if you hold the bond to maturity?

Problem 3: What is the price of a 3 year, 7.5% coupon rate, $1,000 face value bond that pays interest quarterly if the yield to maturity on similar bonds is 11.6%?

Problem 4: What is the yield to maturity of a 9.2% semiannual coupon bond with a face value of $1,000 selling for $885.82 that matures in 9 years?

Problem 5: Wee Beastie Animal Farm bonds have 7 year to maturity and pay an annual coupon at the rate of 5.7%. The face value of the bonds is $1,000. The price of the bonds is $1,011.94 to yield 5.94%. What is the capital gain yield on the bonds?

A. -0.14%

B. -0.13%

C. +0.14%

D. +0.17%

E. -0.12%

Problem 6: A 11 year bond pays interest of $26.40 semiannually, has a face value of $1,000, and is selling for $743.72. What are its annual coupon rate and yield to maturity?

Problem 7: Acme Inc. just issued a bond with a $10,000 face value and a coupon rate of 7%. If the bond has a life of 30 years, pays semi-annual coupons, and the yield to maturity is 9%, what will the bond sell for?

Problem 8: You have just purchased a 15- year, 1,000 par value US Government bond for $909.20. The yield to maturity on the bond is 8.6%. What is the coupon rate?

A. 8.6%

B. 15.0%

C. 7.5%

D. 7.0%

E. 9.0%

Problem 9: The Federal Government 2 year coupon bond has a face value of $1,000 and pays annual coupons of $33. The next coupon is due in one year. Currently, the one and two - year spot rates on Federal Government zero coupon bonds are 4% and 4.5%. What is the correct price for the coupon bond at time zero (immediately)?

A. $976.17

B. $977.68

C. $1.023.49

D. $1,025.00

E. $1,000.00

Problem 10: A bond with an annual coupon of $100 originally sold at par for $1,000. The current yield to maturity on this bond is 9%. Assuming no change in risk, this bond would sell at a ______ in order to compensate_________________.

A. discount; the issuer for the higher cost of borrowing

B. premium; the seller for the above market coupon rate

C. discount; the seller for the above market coupon rate

D. discount; the purchaser for the above market coupon rate

E. premium; the purchaser for the above market coupon rate    

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The paper is in relation to the calculation of yield to maturity of bonds under different conditions. Here there are 10 practical problems required to be solved taking into consideration time value of money.

Reference no: EM13754227

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