Chapter 6: Bonds and Bond Valt. @ Do Homework-dustin jones x G Bond Prices hce r
ID: 2811765 • Letter: C
Question
Chapter 6: Bonds and Bond Valt. @ Do Homework-dustin jones x G Bond Prices hce r he C https://www.mathxl.com/Student/PlayerHomework.aspx?homeworkid.50013654180 F1302 Fall 2018 Hybrid Section Homework: Chapter 6 Homework Score: 0 of 1 pt P6-1 (similar to) Bond prices. Price the bonds from the tollowing table with annual coupon payments Years to Yield to Par Value Coupon Rate Maturity $5,000.00 $5,00000 $1,000 00 $1,00000 6% 5% 9% 30 15 15 5% 8% 11% 9% a. Find the price for the bond in the following table. (Round to the nearest cent.) Years to Par Value Coupon Rate Maturity $5,00000 Yield to Maturity 5% Price 6% Enter your answer in the answer box and then click Check Answer 3 PemainingExplanation / Answer
Solution:
Par value
Coupon rate
Years to maturity
Yield to maturity
Price
$5,000.00
6%
5
5.00%
$5,216.47
$5,000.00
5%
30
8.00%
$3,311.33
$1,000.00
9%
15
11.00%
$856.18
$1,000.00
8%
15
9.00%
$919.39
Working:
Using financial calculator BA II Plus - Input details:
a.
b.
c.
d.
I/Y = R = Rate or yield / frequency of coupon in a year =
5.000000
8.000000
11.000000
9.000000
PMT = Coupon rate x FV / frequency =
-$300.00
-$250.00
-$90.00
-$80.00
N = Number of years remaining x frequency =
5
30
15
15
FV = Future Value =
-$5,000.00
-$5,000.00
-$1,000.00
-$1,000.00
CPT > PV = Present value of bond =
$5,216.47
$3,311.33
$856.18
$919.39
Formula for bond value = |PMT| x ((1-((1+R%)^-N)) / R%) + (|FV|/(1+R%)^N)
$5,216.47
$3,311.33
$856.18
$919.39
Par value
Coupon rate
Years to maturity
Yield to maturity
Price
$5,000.00
6%
5
5.00%
$5,216.47
$5,000.00
5%
30
8.00%
$3,311.33
$1,000.00
9%
15
11.00%
$856.18
$1,000.00
8%
15
9.00%
$919.39
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