Q1.

A
Coupon Rate
1
2
3
4
5
6
7
8
9
10

FV
100
4.75% Price of bond
100
99
4.75
4.534606 4.5290398
4.75
4.32898 4.3183582
4.75
4.132677 4.1174771
4.75
3.945277 3.9259405
4.75
3.766374 3.7433138
4.75
3.595584 3.5691826
4.75
3.432538 3.4031516
4.75
3.276886 3.244844
4.75
3.128292 3.0939005
104.75
65.85879 65.054792
100
99
YTM
4.75%
4.88%
YTM
4.75% #VALUE!

101
4.5401169048
4.3395076861
4.1477625693
3.9644898859
3.7893152736
3.6218809119
3.4618447905
3.3088800116
3.1626741214
66.6635278872
101.0000000425
4.62%
#VALUE!

Q2.A

Coupon

Price

YTM(BEY)
8% FV
1000
Bond A
Bond B
BondC
4.50%
4%
0%
1
45
40
0
0
2
45
40
0
0
3
45
40
0
0
4
45
40
0
0
5
45
40
0
0
6
45
40
0
0
7
45
40
0
0
8
45
40
0
0
9
45
40
0
0
10
1045
40
1000
0
11
40
0
12
40
0
13
40
0
14
40
0
15
40
0
16
40
0
17
40
0
18
40
0
19
40
0
20
1040
1000
1040.5545
1000 456.3869 456.38695

Q3 A
Annuity of 25000 for 20 years at 9%
228,213.6 Principal
271,786 Total Interest Paid
22936 principal paid in last year

Q3B
273,302

4,460.77 First year interest

Q4 A
Bond 1
Bond 2

EAY
10%
10.165%

Q4 B
Bond 1
Bond 2

Future Value
41772482
42721909

Q1.B

Yield

Price
Price
Price

3%

4.75
4.75
4.75
4.75
4.75
4.75
4.75
104.75
112.28446
112.28446
112.28446

YTM(BEY)
6.00%
8.00% 10.00%
Bond A
1127.953 1040.554 961.3913
Bond B 1148.7747
1000 875.3779
Bond C
553.67575 456.3869 376.8895

Q2 B
EAYof Bond B
8.16% Price
Nationalist Bond
1
80 73.97131
2
80 68.39693
3
80 63.24263
4
80 58.47675
5
80 54.07003
6
80 49.99538
7
80 46.2278
8
80 42.74413
9
80 39.52299
10
1080 493.352
YTM
8.15%
990

Compare 8.15% and 8.16% perc

Principal

Q4 C
Reinvestment risk dominates here
if default risk dominates then other might be costly

990

15% and 8.16% percent