FIN 401 Study Guide - Monte Carlo Method, Annual Percentage Rate, Effective Interest Rate

1. ABC issued 12-year bonds at a coupon rate of 8% withsemi-annual payments. If the bond currently sells for $1050 of parvalue, what is the YTM?
2. ABC issued 12-year bonds 2 years ago at a coupon rate of 8%with semi-annual payments. If the bond currently sells for 105% ofpar value, what is the YTM?
3. A bond has a quoted price of $1,080.42. It has a face value of$1000, a semi-annual coupon of $30, and a maturity of five years.What is the current yield? What is the yield to maturity?

XZYY, Inc. currently has an issue of bonds outstanding that will mature in 24 years. The bonds have a face value of $1,000 and a stated annual coupon rate of 20% with semi-annual coupon payments. The bond is currently selling for $857. The bonds may be called in 6 years for 124% of par value. What is the quoted annual yield-to-call for these bonds assuming the company calls the bonds as soon as possible?

A bond is selling for $917.76. It has an annual coupon payment of 3.5% of its $1,000 par value and matures in 17 years. Compute:

a. The bond's yield to maturity

b. the bond's current yield and capital gains yield.

c. The bond's nominal yield to maturity if the coupon payment is made semiannually.

d. The bond's effective yield to maturity of the coupon payment is made semi-annually.

Plese use excel for calculations and explanation.