Find the price and duration of a 3 year 10% coupon bond earning 9%. Step by step using the financial calculator would be most beneficial, please.
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Find the price and duration of a 3 year 10% coupon bond earning 9%. Step by step using the financial calculator would be most beneficial, please.
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- Solve the following problem. Use Excel, financial calculator, or PV and FV Tables. Show your work with the formulas and figures inserted in them. What must be the present value of an AED 10,000 bond with a 9 percent coupon rate, semiannual coupons that has 8 years to maturity if the discount rate is 10 percent.Use of a financial calculator or Excel (functions PRICE and YIELD will be helpful) will be helpful to calculate the following problems. Show your work, include your calculator entries (i.e. N, PV, PMT, FV, IM, and/or Excel formulas where applicable. 1. Suppose there is a bond with a par value of $1,000 that matures in 6 years. Coupon payments are made annually. The coupon rate is 9%. It has a 12% yield to maturity. The annual coupon payments = $ b. The price of the bond today (present value) = $Suppose your friend is debating purchasing a bond that has a $1,000 par value, 13 years to maturity, and a 7% annual coupon. Your friend would like to determine the yield to maturity if the bond sells for a price of $980. In order to use your financial calculator to solve for the rate of return on this bond, you need to know the following information: PV: the bond's value or price N: the number of years before the bond matures PMT: the dollars of interest paid each year, which equals the coupon rate times the par value of the bond FV: par, or maturity, value of the bond Complete the following table by selecting the appropriate values for N, PV and PMT. Then use your financial calculator to solve for the rate of return, and complete the final row of the table. Input $1,000 Keystroke I/Y PV PMT FV Output Suppose your friend wants to know what price the bond will be in three years assuming the yield to maturity remains constant. To calculate what the bond price will be three years from…
- Find the value of a 5.9% Coupon Bond with a required return of 12.21% and 20 years to maturity. Keep 2 decimal places and enter the positive numeric part only. E.g. If your calculator result is $-123.456, enter 123.46.Find the price of a 10% coupon bond with a face-value of $1000, a 12.25% yield to maturity and 8 years to maturity. Calculate this without using excel or any other software.*(from the above information, coupon payment= 10/100*1000=$100)1 ) Solve the following quesitons in an Excels spreadsheet, and create a cash-flow table for each Bond A and Bond B over 6 years. a) Calculate the yield rates for two bonds described below. b) Correctly use Rate of Return (ROR) analysis to determine which, if either, bond an investor with a MARR of 10%, should purchase. c) Confirm your answer to part (b) using Present Worth Analysis. Type out formulas used and calculations performed. d) Confirm your answer to part (b) using Annual Worth Analysis. Type out formulas used and calculations performed.
- State one short term and one long term financial goals of yours. Assume, you have purchased a bond with $200 discount, and it has 5 years maturity with 6% coupon. If the face value of the bond is $2500, calculate YTM.Submit your solutions as an Excel document. Be sure to clearly label the various parts of the problem. 1. Consider the following two bonds that make semi- annual coupon payments. Assume the first coupon payment occurs in exactly six months, and the bond has a face value of $1000 Coupon Rate Time to Maturity YTM Bond A 3.80 % 8 years 3.6% Bond B 3.80% 18 years 4.2% d.) Use a spreadsheet to compute the annualized Macaulay duration and modified duration for Bond A at a yield to maturity of 3.6% Provide an interpretation of the modified duration with regards to maturity and interest rate risk. e.) Use a spreadsheet to calculate the annualized convexity measure of Bond A at a YTM of 3.696. f.) Using the duration approximation formula with a convexity adjustment. what percentage change in the price of Bond A would you expect if the yield decreases by 150 ?Calculate the price of a bond today that pays a coupon of 4% every semester, face value of $10,000, and maturity of 5 years from today. Assume that the YTM today is 3.8% • Calculate the price of the same bond after one semester from today, assuming that the YTM then will be 4.2% . • Calculate the rate of return for this bond. please answer the whole question with writing the formulas used.
- problems should be solved by using a financial calculator or MS excel spreadsheet. Accordingly, you must show the values of all relevant time valu of money variables A 25-year, $1,000 par value bond has an 8.5% semiannual payment coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 5 years from now? (Hint: You need to find the yield-to-maturity firt. Then, find the price in five years).1. Pricing a bond in the secondary market: For each question, use the three methods we learned in class: plug in the values in the formula, handwrite the keys you enter in the Financial Calculator, and use Excel (formula and arguments). Use the Table below for each answer. a. Find the price of a 10-year 10% coupon (paid semiannually). The current yield to maturity is 5%. b. Find the price of a 10-year 5 % coupon (paid semiannually). The current yield to maturity is 10%. c. Based on your answers, discuss the relationship between coupon rate, yield to maturity, and bond price. FORMULA (Plug in the corresponding values in the formula below) 2 Financial Calculator (Indicate the keys you enter and write the answer) 3 Excel (Write the function and arguments in Excel)Solve each of the following questions using both pricing formulas and Excel. 2. A zero-coupon bond has a face value of $21,000 and a maturity of 8 years. Similar bonds have an interest rate of 5% per year. What is the price of this bond?