Reference no: EM132923159

Questions -

Q1) A Japanese company has a bond outstanding that sells for 85 percent of its ¥100,000 par value. The bond has a coupon rate of 4.4 percent paid annually and matures in 15 years. What is the yield to maturity of this bond?

Q2) Union Local School District has bonds outstanding with a coupon rate of 5.1 percent paid semiannually and 18 years to maturity. The yield to maturity on these bonds is 4.6 percent and the bonds have a par value of $10,000. What is the dollar price of each bond?

Q3) Laurel, Inc., and Hardy Corp. both have 9 percent coupon bonds outstanding, with semiannual interest payments, and both are priced at par value. The Laurel, Inc., bond has six years to maturity, whereas the Hardy Corp. bond has 17 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? If interest rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of these bonds be then?

Q4) You purchase a bond with a par value of $1,000, a coupon rate of 6.9 percent, and a clean price of $905. If the next semiannual coupon payment is due in two months, what is the invoice price?

Q5) Bond P is a premium bond with a coupon rate of 8 percent. Bond D has a coupon rate of 3 percent and is selling at a discount. Both bonds make annual payments, have a YTM of 5 percent, and have seven years to maturity. What is the current yield for Bond P and Bond D? If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond P and Bond D?