Find the bond values or yields

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Reference no: EM131503071

This question has 6 parts (a - f) Please show all work

Find the bond values or yields. Assume that the face value of the bonds is $1,000.

(a) Consider a bond paying a coupon rate of 6% per year semiannually when the market interest rate is only 2.5% per half-year, (i.e., the YTM is 5%). The bond has ten years until maturity. Find the bond’s price today.

(b) What is the bond price six months from now in part (1)?

What is its yield to maturity?

(d) A 15-year maturity, 4.2% coupon bond paying coupons semiannually is callable in five years at a call price of $1,040. The bond currently sells at a yield to maturity of 3.6% (1.8% per half-year). What is the bond price given the YTM?

(e) What is the yield to call based on the price computed in part (4)?

(f) ABC Enterprises’ bonds currently sell for $975. They have a 10-year maturity, a semiannual coupon of $15. So total annual coupon payment is $30. Compute their YTM, coupon rate, and current yield.

Reference no: EM131503071

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