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Question 01

Present Value of the coupons 752.315


Present Value of the face / par value 97.222
Bond Value 849.537
Expected Annual Yield (EAY) 12.36%
Question 02
Present Value of the coupons 354.530
Present Value of the face / par value 556.837
Bond Value 911.367

Expected Annual Yield (EAY) 10.25%


Question 03
Yes
No
10%
8%
Question 04
Status
Rate Increase
Bond Value Decrease
Question 05
Present Value of the coupons 449.236
Present Value of the face / par value 422.411
Bond Value 871.647
Question 06
Rate 8.76%
Question 07
Value of coupon paid per period 55.64
Yield per period 5.564%
Question 08
Present Value of the coupons 636.516
Present Value of the face / par value 444.899
Bond Value 1081.415
Question 09
Yield to Maturity (YTM) 6.69%
compounded semiannually
Question 10
Coupon Rate 7.1276%
compounded semiannually
Question 11
0.14
Question 12
R (Nominal Rate of Return) 6.605%
Question 13
6.61%
Question 14
r (Real Rate of Return) 8.6538%
Question 15
Bond X value after 1 year 1158.85
Bond Y value after 1 year 856.79

Bond X value after 3 year 1140.47


Bond Y value after 3 year 871.65

Bond X value after 8 year 1082.00


Bond Y value after 8 year 922.21

Bond X value after 12 year 1018.69


Bond Y value after 12 year 981.65

Bond X value after 13 year 1000


Bond Y value after 13 year 1000

Question 16
a
Bond Bob Value 1000
Bond Tom Value 1000
b
Interest Rates rises by 2%
Bond Bob Value
Present Value of the coupon 141.84
Present Value of the Face/Par Value 822.7
Bond Value 964.54

Bond Tom Value


Present Value of the coupon 614.9
Present Value of the Face/Par Value 231.38
Bond Value 846.28

Percentage change in prices of bond


Bond Bob Value -3.546%
Bond Tom Value -15.372%
c
Interest Rates falls by 2%
Bond Bob Value
Present Value of the coupon 148.68
Present Value of the Face/Par Value 888.49
Bond Value 1037.17
Bond Tom Value
Present Value of the coupon 784.02
Present Value of the Face/Par Value 411.99
Bond Value 1196

Percentage change in prices of bond


Bond Bob Value 3.717%
Bond Tom Value 19.6%

Question 17

Bond Bob Valuen j 825.22


Bond Tom Value k 1174.78

Interest Rates rises by 2%


Bond jValue
Present Value of the coupon 270.95
Present Value of the Face/Par Value 458.11
Bond Value 729.06

Bond k Value
Present Value of the coupon 596.08
Present Value of the Face/Par Value 458.11
Bond Value 1054.19

Percentage change in prices of bond


Bond j Value -11.65%
Bond k Value -10.26%

Interest Rates falls by 2%


Bond j Value
Present Value of the coupon 314.03
Present Value of the Face/Par Value 623.17
Bond Value 937.19

Bond k Value
Present Value of the coupon 690.86
Present Value of the Face/Par Value 623.17
Bond Value 1314.03

Percentage change in prices of bond


Bond j Value 14%
Bond k Value 11.85%
Question 18
APV PMT RATE N
1040 100 ### 14
EFFECTIVE RATE ###
Question 19
APV PMT RATE N
1095 40 ### 20
20 semi annually 6.6823%
Question 21
APV PMT RATE N
1200 98 9% 12.99
Question 22
FV PV RATE N
(a) 1000 ($178.43) 9% 20
FV RS COUPON BOUND
(b) 1000 10000000 10000
FV PV RATE N
-1000 $75.37 9% 30
ZERO COUPONBONDS
$132,676.78
TOTAL
$132,676,784.69