Reference no: EM132822071
Question - Marco Bond is a billionaire who wants to invest some of its petty cash in corporate bonds. You, as the hired financial planner of Marco, suggested the following bonds who all have a yield to maturity of 10% and matures in 15 years:
PCOR - 8% annual coupon rate; P1,000 face value.
PGOLD - 10% annual coupon rate; P1,000 face value.
PSE - 12% annual coupon rate; P1,000 face value.
1) Determine the Current Yield of PCOR.
a. 10.00%
b. 10.42%
c. 9.44%
d. 11.23%
2) Determine the Current Yield of PGOLD.
a. 10.42%
b. 10.00%
c. 9.44%
d. 11.23%
3) Determine the Current Yield of PSE.
a. 9.44%
b. 11.23%
c. 10.00%
d. 10.42%
4) If Marco Bond is interested in the periodic income from the bonds, between PCOR and PGOLD which is better?
a. PCOR because it has a greater current yield than PGOLD
b. PCOR because it has a lesser current yield than PGOLD
c. PGOLD because it has a higher current yield than PCOR
d. Indifferent since both of them has the same yield to maturity rate
5) If Marco Bond is interested in the periodic income from the bonds, between PGOLD and PSE which is better?
a. PSE because it has a lesser current yield than PGOLD
b. Indifferent since both of them has the same yield to maturity rate
c. PSE because it has a higher current yield than PGOLD
d. PGOLD because it has a greater current yield than PSE
6) If Marco Bond is interested in the periodic income from the bonds, between PCOR and PSE which is better?
a. PSE because it has a greater current yield than PCOR
b. Indifferent since both of them has the same yield to maturity rate
c. PSE because it has a lesser current yield than PCOR
d. PCOR because it has a higher current yield than PSE
7) If PCOR bond is sold after a year the total expected return of the bond is 14%, what is approximate price in which PCOR bond is sold.
a. 886.54
b. 890.55
c. 1,110.00
d. 900.00
8) If PGOLD bond is sold after a year the total expected return of the bond is 14%, what is approximate price in which PGOLD bond is sold.
a. 1,440
b. 1,069
c. 1,040
d. 1,563
9) If PSE bond is sold after a year the total expected return of the bond is 14%, what is approximate price in which PSE bond is sold
a. 1,400.00
b. 1,235.56
c. 1,193.37
d. 1,333.33