Bond Valuation and Yield
A bond has a par value of $1,000, pays $50 semiannually and has a maturity of 10 years.
If the bond earns 12% per year, what is the price of the bond?
Rate
Nper
PMT
FV
Type
PV
What is the yield to maturity for the bond?
What would be the bond's price if the rate earned declined to 8% per year?
If the maturity period is reduced to 5 years and the required rate of return is 8% what would be the
Price of the bond?
What is the yield to maturity for the bond when the maturity is 5 years and the required rate of
Return is 8%?
What generalizations about bond prices, interest rates and maturity periods can be made
Based on the calculation made above?
Callable Bonds
The following bonds have a par value of $1,000 and the required rate of return is 10%.
Bond XY: 5
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