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4a.) TTM: 10 years. YIM: 6%. C: 3%. PV:? 4b.) TTM: 10 years. YTM: 8%. C: 3%. PV: ? 4c.) TTM: 10 years. YTM: 4%. C: 3%. PV:? 5a.) TTM: 10 years. YTM: 6%. C: 9%. PV: ? 5b.) TTM: 10 years. YTM: 8%. C: 9%. PV: ? 5c.) TTM: 10 years. YTM: 4% C: 9% PV: ? Questions for Problems 4-5 a) What do problems 4 and 5 tell us about the way the coupon rate affects the sensitivity of a bonds price to a change in the level of interest rates? b.) Why is this the result?
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Assumed par value 1000 3% 779.20 3% 664.50 3% 918.89 996 1,220.80 9% 1,067.10 996 140554 5% 3% 10 10 10 10 10 10 5% 3% 5 a) 10 12 13 4) If the coupon rate increase the price of bond will increase. Also if coupon rate remains constant the price has inverse relation with the YTM 5) There is negative correlation between YTM and Bond and positive correlation with coupon bond and price 15 | 16 17 18Assumed par value 1 10 10 10 10 10 10 0.06 0.08 0.04 0.06 0.08 0.04 0.03 0.03 0.03 0.09 0.09 0.09 -PV(D4,C4,-1000 E4,-1000) -PV(D5,C5,-1000 E5,-1000) -PV(D6,C6,-1000*E6,-1000) -PV(D7,C7,-1000 E7,-1000) -PV(D8,C8,-1000*E8,-1000) -PV(D9,C9,-1000*E9,-1000) 10 12 13 4) If the coupon rate i 15 16 17 18 5) There is negative oc

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