Q#1

A 10-year bond with 12.5% coupon rate and $1000 face value yield to maturity is 14.5% . Assuming annual coupon
payment, calculate the price of the bond. 897

Data:
n= 10
CR = 12.50%
FV $1,000
YTM = 14.50%
P= ?

Coupon Payment (CP) = CR*FV

CP = $125.00

We know formula is

P=(PMT(1-(1/(1+i)^n))/i)+fv(1+i)^n

Putting values in above formula

P= $897.68
Q#2

A five -year bond has an 8% coupon rate and a face value of $1000. If the current price of the bond is $1075,
calculate current yield assuming annual interest payment. 7.4

Data:
n= 5
CR = 8.00%
FV $1,000
P= $1,075
YTM = ?

Coupon Payment (CP) = CR*FV

CP = $80.00

We know formula is

CY=PMT/P

Putting values in formula above

CY = 7.44%
Q#3

A twenty year bond is currently selling at $850 and current yield is 8%. What coupon rate
offered by company? 6.8%

Data:
CR = ?
P= $850
CY = 8%
n= 20
FV = $1,000

We know formula is

CP = CR x FV

Putting values in formula above

CP = $68.00
FV= $1,000
CR = 6.80%
Q#4

A twenty year bond is currently selling at $1250 and current yield is 8%. What coupon rate
offered by company? 10%

Data:
CR = ?
P= $1,250
CY = 8%
n= 20
FV = $1,000

We know formula is

CP = CR x FV

Putting values in formula above

CP = CY x P
CP = $100.00
CR = 10.00%
Q#4

A three-year bond has 8.0% coupon rate and face value of $1000. If the yield to maturity on the bond is10%,
calculate the price of the bond assuming that the bond makes semi-annual coupon interest payments. 949.24

Data: ANNUAL SEMI ANNAULA

n= 3 6
CR = 8.00% 0.04
FV= $1,000
YTM = 10.00% 0.05
P= ?

Coupon Payment (CP) or PMT = CR*FV

PMT $40.00

We know formula is

P=(PMT(1-(1/(1+i)^n))/i)+fv(1+i)^n

Putting values in formula above

P= $949.24
Q#6

A ten-year bond has an 10% coupon rate and a face value of $1000. If the current price of the bond is $1150,
calculate the yield to maturity of the bond (assuming annual interest payments). 7.9%

Data:
n= 10
CR = 10.00%
FV= $1,000
YTM = ?
P= $1,150

Coupon Payment (CP) = CR*FV

CP = $100.00

Putting values in formula above

YTM = 7.91%

-15
1075
Q#7

A bond for J. Morris, Inc. a coupon rate of 6%. The yield to maturity is 7%. The bond has a remaining life of 20 years
and makes semi-annual coupon payments? What is this bond’s current market value? 893

Data: SEMI ANNUAL

n= 40
CR = 3.00%
FV $1,000
YTM = 3.50%
P= ?

Coupon Payment (CP) = CR*FV

CP = $30.00

We know formula is

P=(PMT(1-(1/(1+i)^n))/i)+fv(1+i)^n

Putting values in formula above

P= $893.22
Q#8

A bond for Ballhawkers, Inc. has a coupon rate of 7%. The yield to maturity is 6.8%. The bond has a remaining life
of 30 years and makes semi-annual coupon payments? What is this bond’s current market value? 1025.46

Data:
n= 60
CR = 3.50%
FV $1,000
YTM = 3.40%
P= ?

Coupon Payment (CP) = CR*FV

CP = $35.00

We know formula is

P=(PMT(1-(1/(1+i)^n))/i)+fv(1+i)^n

Putting values in formula above

P= $1,025.46