HomeworkLib
Question

There are 3 bonds in this portfolio A 20 year semi-annual bond where: Par is $100,000...

There are 3 bonds in this portfolio

  1. A 20 year semi-annual bond where:
    1. Par is $100,000
    2. C = 4%
    3. r = 6%         
  2. A 30 year annual bond where:
    1. Par is $50,000
    2. C = 3%
    3. r = 3.5%
  3. a 5 year semi-annual bond where:
    1. Par is $30,000
    2. C = 3%
    3. r = 2.25%

Find the value of each bond in the portfolio & how much is the portfolio worth?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

years semi annual bond a par value (A) years period (N) coupon coupon rate rate 100,000.00 20 40 4% 2000 6.00% 3.00% half yea

30,000.00 years semi annual Bond C par value (A) years period (N) coupon coupon rate rate 10 3% 450 2.50% 1.25% hafl yearly y

FORMULAE

years semi annual bond a par value (A) years period (N) coupon coupon rate rate 100000 20 =+B13*2 0.04 =+B12*B15/2 0.06 =+B17

Bond C par value (A) 30000 semi annual period (N) coupon coupon rate rate =+B34*2 0.03 =+B33*B36/2 0.025 =+B38/2 hafl yearly

please ask if any query.

0 0
Add a comment
Know the answer?
Add Answer to:
There are 3 bonds in this portfolio A 20 year semi-annual bond where: Par is $100,000...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Calculate the price of 8.0% semi-annual bond. The bond was originally issued with a 10-year term...

    Calculate the price of 8.0% semi-annual bond. The bond was originally issued with a 10-year term to maturity and exactly five years remain until maturity. The rates on new 10-year semi-annual bonds of comparable risk are 7.0% and on new five-year semi-annual bonds of comparable risk are 6.0%. Suppose you had an 8%, $10,000 semi-annual bond with three years remaining to maturity. The yield on new three-year bonds of comparable quality is 6%. Calculate what your bond is worth in...

  • ABC issued 12-year bonds at a coupon rate of 8% with semi-annual payments. If the bond...

    ABC issued 12-year bonds at a coupon rate of 8% with semi-annual payments. If the bond currently sells for $1050 of par value, what is the YTM? ABC issued 12-year bonds 2 years ago at a coupon rate of 8% with semi-annual payments. If the bond currently sells for 105% of par value, what is the YTM? A bond has a quoted price of $1,080.42. It has a face value of $1000, a semi-annual coupon of $30, and a maturity...

  • Your portfolio contains 40% of Bond I, 20% of Bond II, 20% of Bond Ill and...

    Your portfolio contains 40% of Bond I, 20% of Bond II, 20% of Bond Ill and 20% of Bond IV. Details of the four bonds are given below: $613.91 10-year zero coupon government bond, par value $1000, current price = II. 10-year zero coupon corporate bond, par value $1000, default premium= 2% III. 5 year 15 % coupon corporate bond, par value $1000, annual coupon payments, default premium 9% and YTM for similar government bond is 6% IV. 5 year...

  • The Basket Weavers Company has 100,000 units of semi-annual coupon, 20-year bonds outstanding that are currently...

    The Basket Weavers Company has 100,000 units of semi-annual coupon, 20-year bonds outstanding that are currently selling at par value ($1000). The coupon rate of the bond is 7.47%. The company also has 1 million shares of 10.5 percent preferred stock outstanding and 5 million shares of common stock outstanding. The preferred stock has a par value of $100 and is selling for $60 per share. The common stock has a beta of 1.5 and is selling for $40 per...

  • Question 5 (14 marks) The Basket Weavers Company has 100,000 units of semi-annual coupon, 20-year bonds...

    Question 5 (14 marks) The Basket Weavers Company has 100,000 units of semi-annual coupon, 20-year bonds outstanding that are currently selling at par value ($1000). The coupon rate of the bond is 7.47%. The company also has 1 million shares of 10.5 percent preferred stock outstanding and 5 million shares of common stock outstanding. The preferred stock has a par value of $100 and is selling for $60 per share. The common stock has a beta of 1.5 and is...

  • Question 5 (14 marks) The Basket Weavers Company has 100,000 units of semi-annual coupon, 20-year bonds...

    Question 5 (14 marks) The Basket Weavers Company has 100,000 units of semi-annual coupon, 20-year bonds outstanding that are currently selling at par value ($1000). The coupon rate of the bond is 7.47%. The company also has 1 million shares of 10.5 percent preferred stock outstanding and 5 million shares of common stock outstanding. The preferred stock has a par value of $100 and is selling for $60 per share. The common stock has a beta of 1.5 and is...

  • Company A is selling 20 year bonds with a $50,000 par value and an annual coupon...

    Company A is selling 20 year bonds with a $50,000 par value and an annual coupon rate of 6.25%. The price of Company B's bonds is currently $11,200. They offer a $10,000 par value and mature in 10 years. The coupon rate is 8% and coupon payments are made semi-annually. Further research suggests to you that both bonds, which are rated as A+, introduce the same risk to you as an investor. If you bought a Company B bond for...

  • An 8 year, 10 percent semi-annual coupon bond, with a par value of $1,000, may be...

    An 8 year, 10 percent semi-annual coupon bond, with a par value of $1,000, may be called in 3 years at a call price of $1,040. The bond sells at $1,060. What is the bonds capital gain or loss yield? Options: A)0.4% B)-0.3% C)-0.5% D)0.51%

  • Question 6.25 Bond Valuation – semi annual interest. Calculate the value of each of the bonds...

    Question 6.25 Bond Valuation – semi annual interest. Calculate the value of each of the bonds shown In the following table, all of which pay interest semi-annually Bond Par value Coupon interest rate Years to maturity Required stated annual return A 1000 10% 12 8% B 1000 12% 20 12% C 500 12% 5 14% D 1000 14% 10 10% e 100 6% 4 14%

  • Corp-X issued corporate bonds one year ago at par with a face value of $1000, an annual coupon rate of 6%(paid semi annually), and a 20 years to maturity. At the moment, bonds of equivalent risk and m...

    Corp-X issued corporate bonds one year ago at par with a face value of $1000, an annual coupon rate of 6%(paid semi annually), and a 20 years to maturity. At the moment, bonds of equivalent risk and maturity to these Corp-X bonds are being issued at par with a coupon rate of 5.5% per year(paid semi annually) 1. At the time that Corp-X bonds were issued, what was the Yield to Maturity of the bonds? And What is the current...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT