130. Yield to maturity--semiannual bond Answer: d Diff: E N
Input the following data in your calculator: N = 30; PV = -1190; PMT = 50; FV = 1000; and then solve for I = 3.9128%, but this interest rate is on a semiannual basis. The nominal YTM is 3.9128% 2 = 7.8257% 7.83%.
131. Yield to call--semiannual bond Answer: a Diff: E N
Input the following data in your calculator: N = 10; PV = -1190; PMT = 50; FV = 1050; and then solve for I = 3.1841%, but this interest rate is on a semiannual basis. The nominal YTC is 3.1841% 2 = 6.3682% 6.37%.
132 . Yield to maturity--annual bond Answer: a Diff: E N
Enter the following data as inputs in the financial calculator:
N = 12; PV = -1025; PMT = 80; FV = 1000; and then solve for I = YTM = 7.6738% 7.67%.
133 . Price risk--annual bond Answer: e Diff: M N
Old YTM = 7.6738%. New YTM = 7.6738% - 1% = 6.6738%.
Using the new YTM, first solve for the new bond price by entering the following data in your financial calculator:
N = 12; I = YTM = 6.6738; PMT = 80; FV = 1000; and then solve for PV =
-$1,107.19. V B = $1,107.19.
Now, you can calculate the change in price: = 8.02% 8%.
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