1.
A:
Bond Value=PV(5%,5,-15%*1000,-1000)=1432.94767
Current yield=15%*1000/PV(5%,5,-15%*1000,-1000)=10.468%
2.
B:
Bond Value=PV(15%,5,-15%*1000,-1000)=$1,000.000
Current yield=15%*1000/PV(15%,5,-15%*1000,-1000)=15.000%
3.
C:
Bond Value=PV(15.6%,5,-15%*1000,-1000)=$980.170
Current yield=15%*1000/PV(15.6%,5,-15%*1000,-1000)=15.303%
4.
is equal to, =
5.
is equal to
6.
is lower than, <
7.
is lower than
8.
is greater than, >
9.
is greater than
10.
Bond B
11.
The probability of default is zero
12.
YTM:
=RATE(18,9%*1000,-950.35,1000)
=9.59%
YTC:
=RATE(8,9%*1000,-950.35,1000)
=9.93%
13.
18 years
14.
9.59%
Bond Bond Value Current Yield Bond A Bond B Bond C Discount Rate 5.00% 15.00% 15.60%...
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