Introduction to Finance

Once completed view the video. Let's discuss!

Tutorial (6) _Bond Valuations.

▪ Details: 10 questions

▪ Duration of submission: 1 week

 Question 1 :

Consider a bond issued ten years ago with an at – issue time to maturity of 30 years. The bond’s coupon rate is 8 percent, and it currently trades in the bond market for 109 percent. Assuming a par value of $1000, what is the bond’s current time to maturity, semiannual interest payment and bond price in dollars?

Question 2 :

ABX Industrial Products' bonds have a 7.60 percent coupon and pay interest annually. The face value is $1,000 and the current market price is $1,062.50 per bond. The bonds mature in 16 years. What is the yield to maturity?

Question 3 :

The bonds issued by Stainless Tubs bear a 6 percent coupon, payable semiannually. The bonds mature in 11 years and have a $1,000 face value. Currently, the bonds sell for $989. What is the yield to maturity?

Question 4 :

Petron Oil Supply offers 7.5 percent coupon bonds with semiannual payments and a yield to maturity of 7.68 percent. The bonds mature in 6 years. What is the market price per bond if the face value is $1,000?

Question 5 :

Great Com. has a 6.75 percent coupon bond outstanding that matures in 10.5 years. The bond pays interest semiannually. What is the market price per bond if the face value is $1,000 and the yield to maturity is 6.69 percent?

Question 6 :

MyIP Properties offers a 9.5 percent coupon bond with annual payments. The yield to maturity is 11.2 percent and the maturity date is 11 years from today. What is the market price of this bond if the face value is $1,000?

Question 7 :

What is the price of the following bond?

• Face value: $1,000
• Maturity: 10 years
• Coupon rate: 8%
• Discount rate: 9%

Question 8 :

What is the price of the following bond?

• Face value:  $1,000
• Maturity: 50 years
• Coupon rate: 10%
• Discount rate: 12%

Question 9 :

What is the value of the following semi-annual bond?

• Face value: $1,000
• Maturity:  10 years
• Coupon rate:  10%
• Discount rate:  9%

Question 10 :

What is the value of the following semi-annual bond?

• Face value:  $1,000
• Maturity: 9.5 years
• Coupon rate: 7%
• Discount rate: 7%