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10 Mar 2019

2. A bond with a coupon rate of 8% makes semiannual coupon payments on January 15 and July 15 of each year. The ask price for the bond on January 30 is at 100:08. What is the Invoice Price of the bond? The coupon period has 182 days

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Casey Durgan
Casey DurganLv2
10 Mar 2019

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Please answer questions 7 to 11 with work, thank you!


7) Cohen has issued a bond with the following characteristics: Par: $1,000; Time to maturity: 15 years; Coupon rate: 7%; Semiannual payment. What is the price of the bond if the YTM is 9%?

8) The Pane bond has 11.5 years to maturity, a YTM of 7.6%, and a current price of $1,060. The bond makes semiannual payments. What is the coupon rate on this bond?

9) What is the inflation rate if nominal return is 14% and real return is 10%?

10) Jay, Inc. and Nic Corp. both have 7% coupon bonds outstanding with semiannual payments and both are priced at par value. The Jay, Inc. bond has 2 years to maturity, while the Nic Corp. bond has 15 years to maturity. If interest rate suddenly rises from 7% to 9%, what is the percentage change in the price of these bonds? If interest rate suddenly decreases by 2%, what is the percentage change in the price of these bonds?

11. You purchase a bond with an invoice price of $950. The bond has a coupon rate of 6.8%, and there are 2 months to the next semiannual coupon date. What is the clean price of the bond?

A coupon bond paying semiannual interest is reported as having an ask price of 117% of its $1,000 par value. If the last payment was made one month ago and the coupon rate is 6%, what is the invoice price of the bond?

A corporate bond is quoted at 101.67 in the WSJ. The annual coupon rate is quoted as 10% and the bond has 6 years until maturity. Also 50 days have passed since the last payment in the semi-annual coupon period. What is the dirty price for this bond? Assume there are 182 days in the coupon period and a face value of 1,000.

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