Reference no: EM132956573

1) A zero-coupon bond with a 6-year maturity and a face value of $1000 has a market value of $796. What is the bond's YTM? Enter your answer as a percentage number but without the "%" (Example: Enter 10.50 for 10.50%; Do not enter "10.50%" or "0.1050").

A bond has a face value of $1000 with a maturity of 8 years. Its annual coupon payment is 3% of its face value. The YTM for bond is 5%. What is the market value of the bond? Enter your answer as dollar amount without the dollar sign "tiny_mce_markerquot; and keep two decimals (Example: Enter 549.49 for $549.49; do not enter "$549.49").

3)A bond has a face value of $1000 with a maturity of 2 years. Its annual coupon payment is 3% of its face value. The YTM for bond is 8%. What is the modified duration of this bond? Enter your answer as a number without any units; keep two decimals.

4)A risky bond has a maturity of two years with a coupon rate of 5% to be paid annually and a face value of $1000. The YTM of the bond is 4%. What is the equivalent zero-coupon face value if this zero-coupon bond has the same maturity and YTM as the coupon paying bond? Enter your answer as dollar amount without the dollar sign "tiny_mce_markerquot; and keep two decimals (Example: Enter 549.49 for $549.49; do not enter "$549.49").

5)Suppose the face value of a firm's zero-coupon debt is $6 billion with a maturity of 2 years and YTM at 5%. The equivalent risk-free rate is 2%. Based on the Black-Scholes/Merton model, what is the value of a put on the firm's assets with a strike at the face value of its debt ($6 billion)? Enter your answer as billion dollar amount without the dollar sign "tiny_mce_markerquot; or "billion;" keep two decimals (Example: Enter 0.89 for $0.89 billion; do not enter "$0.89 billion" or "0.89 billion" or "$0.89").