1. Below is information about three $10000 par value bonds, each of which pays couponsemiannually. The required rate of return on each bond is 14%.
Calculate the value of the bonds and determine whether the bond is selling at discount, premium or par value.
Bond
Coupon Rate (%)
Maturity (years)
1
8
5
2
14
10
3
16
15
2. Using the Interpolation Method to calculate the YTM for the below Bonds:
> The par value $18000
> Coupon Rate 10% every year
> Maturity period 10 years
> Market Value of bond $21800
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