Show complete cash flows from the bond

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Reference no: EM131158187

Homework

NOTES:

1. Everyone is expected to work individually with different quotations. Copying or multiple submissions will be penalized.
2. The HW must be submitted in Excel format. Use Excel for all computations.
3. Upload the HW in eCourses

QUESTIONS:

From either www.wsj.com or www.finance.yahoo.com, pick up a quotation of each of the following securities and answer the questions that follow. Start with "markets" tab, then explore to find out bond quotes.Report each quotation in full with the date of the Journal at the top of every bond.

1. A corporate bond having at least 10 year to mature and compute

a. The bond's price (last)
b. Annual coupon interest ($)
c. Bond's current yield
d. Yield to maturity using semi-annual compounding. Show complete cash flows from the bond over its remaining life.
e. Compare the coupon rate and the YTM. Is the YTM higher/lower than the coupon rate? Why?

2. A U.S. Treasury bond having at least 10 year to mature and compute

a. The bond's asked price
b. Annual coupon interest
c. Bond's current yield
d. Yield to maturity using semi-annual compounding. Show complete cash flows from the bond over its remaining life.
e. Compare the coupon rate and the YTM. Is the YTM higher/lower than the coupon rate? Why?

3. A Treasury stripped bond with principal only.
a. On a time line, show complete cash flows from the bond over its remaining life
b. Compute the asked yield.

4. A Treasury stripped bond with coupon only. Show complete cash flows from the bond over its remaining life and compute the asked yield.

Reference no: EM131158187

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