Question 01

Present Value of the coupons 752.315

Present Value of the face / par value 97.222
Bond Value 849.537
Expected Annual Yield (EAY) 12.36%
Question 02
Present Value of the coupons 354.530
Present Value of the face / par value 556.837
Bond Value 911.367

Expected Annual Yield (EAY) 10.25%

Question 03
Yes
No
10%
8%
Question 04
Status
Rate Increase
Bond Value Decrease
Question 05
Present Value of the coupons 449.236
Present Value of the face / par value 422.411
Bond Value 871.647
Question 06
Rate 8.76%
Question 07
Value of coupon paid per period 55.6433
Yield per period 5.564%
Question 08
Present Value of the coupons 636.516
Present Value of the face / par value 444.899
Bond Value 1081.415
Question 09
Yield to Maturity (YTM) 6.69%
compounded semiannually
Question 10
Coupon Rate 7.1276%
compounded semiannually
Question 11
0.1448
 Question 12
R (Nominal Rate of Return) 6.605%
Question 13
6.61%
Question 14
r (Real Rate of Return) 8.6538%
Question 15
Bond X value after 1 year 1158.85
Bond Y value after 1 year 856.79

Bond X value after 3 year 1140.47

Bond Y value after 3 year 871.65

Bond X value after 8 year 1082.00

Bond Y value after 8 year 922.21

Bond X value after 12 year 1018.69

Bond Y value after 12 year 981.65

Bond X value after 13 year 1000

Bond Y value after 13 year 1000

Question 16
a
Bond Bob Value 1000
Bond Tom Value 1000
b
Interest Rates rises by 2%
Bond Bob Value
Present Value of the coupon 141.8380201665
Present Value of the Face/Par Valu 822.70247479188
Bond Value 964.54049495838

Bond Tom Value

Present Value of the coupon 614.89804107531
Present Value of the Face/Par Valu 231.37744865586
Bond Value 846.27548973117

Percentage change in prices of bond

Bond Bob Value -3.546%
Bond Tom Value -15.372%
c
Interest Rates falls by 2%
Bond Bob Value
Present Value of the coupon 148.68393611242
Present Value of the Face/Par Valu 888.48704791569
Bond Value 1037.1709840281
Bond Tom Value
Present Value of the coupon 784.01765397879
Present Value of the Face/Par Valu 411.98675951591
Bond Value 1196.0044134947

Percentage change in prices of bond

Bond Bob Value 3.717%
Bond Tom Value 19.6%

Question 17

Bond Bob Valuen j 825.22

Bond Tom Value k 1174.78

Interest Rates rises by 2%

Bond jValue
Present Value of the coupon 270.9484780086
Present Value of the Face/Par Valu 458.1115219914
Bond Value 729.06

Bond k Value
Present Value of the coupon 596.07732580946
Present Value of the Face/Par Valu 458.1115219914
Bond Value 1054.1888478009

Percentage change in prices of bond

Bond j Value -11.65%
Bond k Value -10.26%

Interest Rates falls by 2%

Bond j Value
Present Value of the coupon 314.02755064991
Present Value of the Face/Par Valu 623.16693922011
Bond Value 937.19448987002

Bond k Value
Present Value of the coupon 690.86061142979
Present Value of the Face/Par Valu 623.16693922011
Bond Value 1314.0275506499

Percentage change in prices of bond

Bond j Value 14%
Bond k Value 11.85%
Question 18
APV PMT RATE N
1040 100 9.2120% 14
EFFECTIVE RATE 9.5708%
 Question 19
APV PMT RATE N
1095 40 3.3412% 20
20 semi annually 6.6823%
Question 21
APV PMT RATE N
1200 98 9% 12.9875
Question 22
FV PV RATE N
(a) 1000 ($178.43) 9% 20
FV RS COUPON BOUND
(b) 1000 10000000 10000
FV PV RATE N
-1000 $75.37 9% 30
ZERO COUPONBONDS
$132,676.78
TOTAL
$132,676,784.69