What will be the new price of the bond

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Reference no: EM133392616

On 15 December 2022, JPM 2.625% bonds maturing on 15 December 2024 were trading at $101.55 per $100 face value. These bonds pay semi-annual coupons of 2.625%/2, on 15 June 2023, 15 December 2023, 15 June 2024, and 15 December 2024.

Question 1: Please compute the yield-to-maturity, assuming compounding two times per year.

Note: Please express your result as a percentage and keep two digits after the decimal point (e.g. 12.34% or 1.23%).

Question 2: If the yield-to-maturity increases to 3% per year, what will be the new price of the bond? What if the yield increases to 6% per year?

Note: Please express your results as a dollar value and keep two digits after the decimal point (e.g. $100.34)

Question 3: Graph the price-yield relationship for this bond for yields between 0% and 10% per year (it makes sense to use Excel here). The yield should be on the horizontal axis, and the price on the vertical axis. (Label the axes on your graph.)

Note: Please express your result as a percentage and keep two digits after the decimal point (e.g. 12.34% or 1.23%) and assume an Actual/365 day count

Reference no: EM133392616

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