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  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?

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Lelia Lubowitz
Lelia LubowitzLv2
28 Sep 2019

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A bond portfolio named DEX, comprises four bonds (face value=$1000):

1)50 semi-annual bond, 5-year maturity, a coupon rate of 4%.

2)100 annual bonds, 30-year maturity, 8% coupon bond.

3)150 zero coupon bonds, 10-year maturity.

4)200 zero coupon bonds, 20-year maturity.

If yield to maturity (discount rate) is 6% for all bonds per year, what is the market value of DEX?

A bond portfolio named DEX, comprises four bonds (face value=$1000):

1)50 semi-annual bond, 5-year maturity, a coupon rate of 4%.

2)100 annual bonds, 30-year maturity, 8% coupon bond.

3)150 zero coupon bonds, 10-year maturity.

4)200 zero coupon bonds, 20-year maturity.

Given a 6% initial yield, what is the DEX’s duration (use Macaulay’s duration)?

The yield to maturity on two 10-year maturity bonds currently is 7%. Each bond has a call price of $1,100. One bond has a coupon rate of 6% and the other 8%. Assume for simplicity that bonds are called as soon as the present value of their remaining payments exceeds their call price. What will be the capital gain on each bond if the market interest rate suddenly falls to 6%. A 20-year maturity 9% coupon bond paying coupons semiannually is callable in 5 years at a call price of $1050. The bond currently sells at a yield to maturity of 8%. What is the yield to call?

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