Problem 1: Calculate the price of the following bond: Par value = $1,000; Coupon rate...
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Problem 1: Calculate the price of the following bond: Par value = $1,000; Coupon rate = 6% (paying coupon annually); Time-to-maturity = 5 years; the discount rate is 12%.
Problem 2: Calculate the price of the following bond: Par value = $10,000; Coupon rate = 8% (paying coupon annually); Time-to-maturity = 6 years; the interest rate is 9%.
Problem 3: Calculate the price of the following bond: Par value = $1,000; Coupon rate = 8% (the bond pays coupon semi-annually); Time-to-maturity = 3 years; the appropriate discount rate is 10%.
Problem 4: The following bond is currently trading at $929.76; it has a par value of $1,000, pays 6% coupon annually, and has a time-to-maturity of 10 years. What is the yield-to-maturity (interest rate) of this bond?
Problem 5: Bond A pays 12% coupon annually, has a par value of $1,000 and will mature in 3 years. Using a 10% discount rate (Yield-to-Maturity), what is the value of the bond?
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