CLASS EXERCISES

1. You acquired a bond today at US $ 1,368.31, the bond contains a coupon rate of 15%, its
expiration is within 14 years. In nominal value it is US $ 1,000. Indicate your yield at
maturity (YTM).

2. The company Fierros S.A. bought a 10 year bond the 1st. January 2015 with a Coupon Rate
Coupon of 12% per year. Bond value today? payable annually.

3. A Macrogates Industries bond has a coupon rate of 10% and a value nominal of US $ 1,000
the coupon is paid semiannually and the bond has 20 years left for maturity: if investors
require a 12% annual return, So what will the value of the bond be today?

4. A MacroAple Industries bond has an 8% coupon rate, payable Biannually, its nominal value
is US $ 1,000 and will expire in 6 years. Yes Currently its quoted price is US $ 911.37, so
what will be your Expiration yield?

5. IBFD Inc. bought $500,000 worth of bonds with par value of $1000. With a 15% rate of
interest and a maturity date in 20 years. 5 years later you decide to sell, interest rates are
now 12% for a $1000 bond. At what price should I sell?

6. Suppose we are in November of the year 2000 and that we have considered buying seven
United States treasury bonds from North America, which pay their coupons as usual at an
annual rate of 14%, the face value of the bond is US $ 1,000 and will be paid in November
2020.
a. Graph the timeline with its components and calculate the current price of the
Investment considered at 14% per year with two coupons per year.
b. If the rate rises to 16%, what will be the current price of the investment?
c. If the rate is 12%, then what will be the new current value of the investment?