Calculate yield to maturity of a bond

    • [DOCX File]Unisa Study Notes

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      Given PRICE you can solve for kd (market rate or yield to maturity) Sample Problem #1 – Solving for Price Given a 4-year bond with a $1000 face value and a 5% coupon rate, annual compounding (annual periodic interest payments), find the price of the bond if the market rate for similar bonds is 6%.

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    • [DOCX File]Homework Assignment – Week 2

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      Consider a bond paying an annual coupon of $80 with a face value of $1,000. Calculate the yield to maturity if the bond has. 20 years remaining to maturity and is priced at $1,200. 10 years remaining to maturity and is priced at $950. HexCorp Inc. has two different bonds currently outstanding. Bond A has a face value of $40,000 and matures in ...

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    • [DOC File]Bond Yields and Prices

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      For calculating yield to maturity, the price of the bond, or present value of the bond, is already known. Calculating YTM is working backwards from the present value of a bond formula and trying to determine what r or i is. C= COUPON = 10% of R1 000 = R100. F= FV or Par Value. A higher yield to maturity will have a lower present value or purchase price of a bond.

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    • [DOC File]Solutions to Questions and Problems

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      Calculate the present value of a $1,000 zero-coupon bond with five years to maturity if the yield to maturity is 6%. A lottery claims their grand price is $10 million, …

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    • [DOC File]Bond Prices and Yields - Salisbury University

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      For a given maturity, the bond’s current price falls as yield to maturity rises. For a given yield to maturity, a bond’s value rises as its maturity increases. When yield to maturity equals the coupon rate, a bond’s current price equals its face value regardless of years to maturity. 4. Consider a coupon bond that has a $1,000 per value ...

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    • [DOC File]UNIT 6: VALUATION OF BONDS, PREFERENCE AND …

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      A 10 year, 12 percent semiannual coupon bond with a par value of $1000 may be called in 4 years at a call price of $1060. The bond sells for $1,100 (assume the bond has just been issued) What is the bond’s yield to maturity. What is the bond’s current yield. What is the bond’s capital gain or loss yield. What is the bond’s yield to call

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    • [DOC File]Quantitative Problem Chapter 3

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      The bond’s yield to maturity will increase from 8.5%, effective annual interest (EAR) to 8.8%, EAR, when the perceived default risk increases. 6 month interest rate equivalent to 8.5% EAR = (1.085)1/2 – 1 = .04163 6 month interest rate equivalent to 8.8% EAR = (1.088)1/2 – 1 = .04307

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    • [DOC File]First, you have to do problem 4-9 using a financial calculator

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      22. To find the number of years to maturity for the bond, we need to find the price of the bond. Since we already have the coupon rate, we can use the bond price equation, and solve for the number of years to maturity. We are given the current yield of the bond, so we can calculate the price as: Current yield = …

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    • How to Calculate Yield to Maturity: 9 Steps (with Pictures)

      D*can be used to calculate the bond’s percentage price change for a given change in interest rates. Ex. Yield on 8% 5 year bond selling at par has duration* of 4.31 years rates go to 71/2%. ΔP/P = - 4.31* (-.005) = .0216 =2.16%. Convexity. If you have large yield …

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