JENNY CAJES BSTM102

1. Determine the current yield of a bond whose face value is

₱33,200 and pays a yearly of 13.7% if purchased at ₱36,700.

When the price of bond is ₱33,200

Current yield = 0 .
= 13.7%

When the price of bond is ₱36,700

Current yield = 0 .

2. What is the current yield to bond whose face value is ₱26,200

and pays a yearly interest of 8% if purchased of ₱18,400?

When the price of bond is ₱26,200

Current yield = 0 .
= 8%

When the price of bond is ₱18,400

Current yield = 0 .
= 11.39%
3. Determine the current yield to bond whose face value is
₱17,560 and pays a yearly interest of 8.7% if purchased at
₱16,970?

When the price of bond is ₱26,200

Current yield = 0 .
= 8.7%

When the price of bond is ₱16,970

Current yield = 0 .
= 9%

4. A ₱75,000 at 11% bond pays coupon semiannually redeemable

at ₱90,000 on January 13, 2017 is bought on January 13, 2011
to earn 13% compounded semiannually. Find the purchase
price.

 Given:
V = ₱75,000
r = 11% or 0.11
j = 13% or 0.13
m= 2
n = tm 6(2) = 12
 i=
b= = 0.11/2 = 0.045
k = Fb = 75,000(0.055) =
4,125

SOLUTION:
P=V
p = 75,000 (1 + 0.065) −12 + 4,125
p = 75,000 (1.065) −12 +4,125

p = 75,000 (0.4696828549) + 4,125(8.8386190935)

p = 35,226.2140792499 + 36,459.3037606875
p = 71,685.51

The price of the bond to yield 13% is ₱71,685.51

V = 75,000 (0.11) = 8,250

p = 35,226.2140792499 + 36,459.3037606875
p = 71,685.51

The price of bond is ₱27,529.62