FIN 300 unit 2 hw problems

A t-bill with a face value $10,000 and 97 days to maturity is selling at a bank discount ask yield of 4.4%. What is the price of the bill?
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A t-bill with a face value $10,000 and 97 days to maturity is selling at a bank discount ask yield of 4.4%. What is the price of the bill?
$9881.44
A t-bill with a face value $10,000 and 97 days to maturity is selling at a bank discount ask yield of 4.4%. What is the bond equivalent yield?
4.514%
A coupon bond paying semiannual interest is reported as having an ask price of 124% of its $1000 par value. If the last interest payment was made one month ago and the coupon rate is 7% what is the invoice price of the bond? Assume that the month has 30 days and the coupon period has 182 days.
1245.83
A bond with an annual coupon rate of 5.4% sells for $965. What is the bond's current yield?
55.95%
You buy a seven year maturity bond that has a 5.75% current yield and a 5.75% coupon (paid annually). In one year, promised yields to maturity have risen to 6.75%. What is your holding-period return?
0.94%
A 25 year maturity bond with par value $1000 makes semiannual coupon payments at a coupon rate of 6%. Find the bond equivalent and effective annual yield to maturity of the bond if the bond price is $950. (2 answers)
bond ey: 6.59%
Effective: 6.68%
A 25 year maturity bond with par value $1000 makes semiannual coupon payments at a coupon rate of 6%. Find the bond equivalent yield and effective annual yield to maturity of the bond if the bond price is $1000. (2 answers)
Bond ey: 6%
Effective: 6.09%
A bond with a coupon rate of 7% makes semiannual payments on January 15 and July 15 of each year. The Wall Street journal reports the ask price for the bond on January 30 at 100.0938. What is the invoice price of the bond. The coupon period has 182 days.
1003.818
A 20 year maturity, 7% coupon bond paying coupons semi-annually is callable in seven years at a call price of $1,200. the bond currently sells at a yield to maturity of 6.0% (3.0% half-year). What is the yield to call?
7.127%
A 20 year maturity, 7% coupon bond paying coupons semi-annually is callable in seven years at a call price of $1,200. the bond currently sells at a yield to maturity of 6.0% (3.0% half-year). What is the yield to call if the call price is $1,200 but the bond can be called in four years instead of seven years?
10.66%
A bond currently sells for $1060 which gives it a yield to maturity of 5%. Suppose that if the yield increases by 50 basis points, the price of the bond falls to $1,035. What is the modified duration of this bond?4.95You own a fixed-income asset with a duration of four years. If the level of interest rates, which is currently 8.8% goes down by 10 basis points, how much do you expect the price of the asset to go up/down (in percentage terms)?0.36%A pension plan is obligated to make disbursements of 1.2 million, 2.2 million, and 1.2 million at the end of each of the next three years, respectively. The annual interest rate is 10%. If the plan wants to fully fund and immunize its position, how much of its portfolio should it allocate to one-year zero-coupon bonds and perpetuities, if these are the only two assets funding the plan? (unanswered)Pension fund pay lifetime annuities to recipients. If a firm remains in business indefinitely, the pension obligation will resemble the perpetuity. Suppose, therefore, that you are managing a pension fund with obligations to make perpetual payments of 2.6 million per year to beneficiaries. The yield to maturity on all bonds is 16%. If the durations of 5-year maturity bonds with coupon rates of 12% (paid annually) is 4.0 years and the duration of 20 year maturity bonds with coupon rates of 6% (paid annually) is 7.9 years, how much of these coupon bonds (in market value) will you want to hold to both fully fund and immunize your obligation?5 year bond: 6.875 20 year bond: 9.375You are managing a portfolio of $1.0 million. Your target duration is 30 years, and you can choose from two bonds: a zero coupon bonds with maturity five years and perpetuity each currently yielding 2%. How will these fractions change next year if target duration is now twenty nine years?zero coupon: 0.5238 perp bond: 0.47619You are managing a portfolio of $1.0 million. Your target duration is 30 years, and you can choose from two bonds: a zero coupon bonds with maturity five years and perpetuity each currently yielding 2%. How much of the zero-coupon bond and the perpetuity will you hold in your portfolio?Zero coupon: 0.456 perp bond: 54.34A 30 year maturity bond making annual coupon payments with a coupon rate 15% has a duration of 11.29 years and a convexity of 184.0. The bond currently sells at a yield to maturity of 8%. What price would be predicted by the duration rule, if its yield to maturity falls 7%? (unanswered)A 30 year maturity bond making annual coupon payments with a coupon rate 15% has a duration of 11.29 years and a convexity of 184.0. The bond currently sells at a yield to maturity of 8%. What price would be predicted by the duration with convexity rule, if its yield to maturity falls to 7%.(unanswered)A 25 year maturity bond has a 8% coupon rate, paid annually. It sells today for 887.42. A 15-year maturity bond has a 7.5% coupon rate also paid annually. It sells today $899.5. A bond market analyst forecasts that in five years, 20-year maturity bonds will sell at yields to maturity of 9% and that 10-year maturity bonds will sell at yields of 8.5%. Because the yield curve is upward sloping, the analyst believes that coupons will be invested in short-term securities at a rate of 7%. Calculate the expected rate of return of the 25-year bond over the five-year period.80