4.Calculate the value of a non-callable 10-year bond with a coupon rat

QUESTION

4.Calculate the value of a non-callable 10-year bond with a coupon rate of 6% compounded semi-annually if you expect 8% yield on the bond. Assume a $1,000 face value for the bond.A) $864.10B) $918.89C) $1,137.11D) $828.81E) $1,085.305.Calculate the spread to treasuries on a 30 year corporate bond wi
4) According to the given information,FV = $1000NUmber of years = 10Semi-annual YTM = 8% / 2 = 4%Semi-annual periods = 10 * 2 = 20Coupon payment = 6% * $1000 = $60Semi-annual coupon payment = $60 * (6/12) = $30Calculating the value of the bond using excel sheet:Step1: Go to excel and click “insert” to insert the function.Step2: Select the “PV” function as we are finding the value of the bond in this case.Step3: Enter the values as Rate = 4%; Nper = 20; PMT = -30; FV = -1000Step4: Click “OK” to get the desired value.The value comes to “$864.10″The correct option is a) $864.105) The

fference in yield between the offered yield of the bond you are researching and the yield of its Treasury of similar maturity. The spread is measured in basis points (1 / 100 of a percentage point)The correct option is d) 3.0) Calculating the taxable equivalent yield on municipal bond:TEY = Interest rate / (1 Tax rate) = 0.06 / (1 0.25) = 0.06 / 0.75 = 0.08 or 8%The correct option is 8%

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