YIELD 4.093111 The bond has a face value of $1,000.00 and makes semiannual payme
ID: 2726474 • Letter: Y
Question
YIELD 4.093111
The bond has a face value of $1,000.00 and makes semiannual payments.
1. The KT BUG, bond sells at: (A) par value (B) A discount from par (C) par value less the annual coupon payment (D) A premium over par
(The correct answer is D. PLEASE EXPLAIN WHY)
2. The KT BUG bond is a(n) __________grade bond. (A) High (B) Medium (C) Very Low (D) Low
(The correst answer is D. PLEASE EXPLAIN WHY)
3. The KT BUG, bond makes an annual interest payment of: (A) $32.32 (B) $20.47 (C) $40.93 (D) $64.60
(The correct answer is D. PLEASE EXPLAIN WHY)
4. The High of 103.875 can be interpreted as:
(A) a high price of $103.875
(B) a high annual coupon payment of $103.875
(C) a high price of 103.875 percent of the bond's current value (this is the correct answer, why?)
(D) a high price equal to 103.875 percent of the bonds current value
ISSUER NAME KT BUG SYMBOL FJFIEK23404 COUPON 6.46% MATURITY 04/28/2019 HIGH 103.875 LOW 103.25 LAST 103.375 CHANGE -0.425Explanation / Answer
semiannual period interest payment present value factor@4.093% present value of cash flow 1 32.3 0.97995 31.65239206 2 32.3 0.960302 31.01776851 3 32.3 0.941049 30.39586903 4 32.3 0.922181 29.7864385 5 32.3 0.903691 29.18922692 6 1032.3 0.885572 914.1764134 value of ond 1066.218108 answer is D bond is selling out at a price of 1066.21 which is at premium of 66.21 answer is D it is low grade bond because coupon rate is high but yield is low answer is D total annual interest 32.3*2 = 64.6 answer is c a high price of 103.875 percent of the bond's current value because bond is selling out at 103.875 times of current value and this is the highest price for the time.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.