Solution-Mr alert tucker of pleasant valley ohio is an

Mr alert tucker of pleasant valley ohio is an investor who

Reference no: EM13480060

Mr. Alert Tucker of Pleasant Valley, Ohio is an investor who is interested in allocating part of his portfolio to investment-grade corporate bonds with 15-year maturity. He recently received two proposals to choose from.

Prudential: A 7% coupon bond that sells for $1,100. Coupon payments are made semiannually.

Morgan Stanley: A 6% coupon bond that sells for $980. Coupon payments are made annually.

A-Calculate each option YTM and CY.

B-If Prudential bond can be called at the end of five years at a call value of 950, calculate YTC.

C-If Morgan Stanley bond can be called at the end of seven years at a call value of 985, calculate YTC.

Answer

Q#	Bond	N	PMT	FV	PV	I =YTM	CY
1.a	Prudential
1.a	Morgan Stanley
1.b	Bond	N	PMT	CV	PV	YTC
1.b	Prudential
1.c	Bond	N	PMT	CV	PV	YTC
1.c	Morgan Stanley

Reference no: EM13480060

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Mr alert tucker of pleasant valley ohio is an investor who

Reference no: EM13480060

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