Question

Question 5

A semiannual-pay bond has 11 years to maturity, a yield to maturity of 10.37 percent and is priced at $1080.88. What is its annual coupon rate? Answer in percent to two decimals.

Question 6

A premium annual-pay bond pays a $77 coupon, has a yield to maturity of 5.78%, and is priced at $1136.96. How many years till the bond matures? Answer in years to at least two decimal places.

Answer 1

Question 5

Answer: Annual coupon rate is 11.62%

Yeild to Maturity Rate (Yeild/2) Years to Maturity NPER (Years to maturity*2) Face Value Price (PV) Semi Annual Coupon (PMT) Coupan paid Annually Coupan rate Annually Annual coupan rate 10.37% 5.19% 11 22 1000 1080.88 58.10 116.20 0.116197101 11.62%

10.103 Yeild to Maturity Rate (Yeild/2) 0.05185 Years to Maturity NPER (Years to maturity*2) 22 Face Value 1000 Price (PV) 1080.88 Semi Annual Coupon (PMT) =PMT(C5,C7,-C9,C8) Coupan paid Annually =C10*2 Coupan rate Annually =(C10/C8)*2 Annual coupan rate 0.1162

Question 6

Answer: The bond matures in 9.46 years.

5.78% 77 Yeild of maturity Coupan value Price Face value No.of years to bond matures No.of years to bond matures 1136.96 1000 9.459653 9.46 years cole

B Yeild of maturity 0.0578 Coupan value 77 Price 1136.96 Face value 1000 No.of years to bond matures =NPER(C3,C4,-C5, C6) No.of years to bond matures 9.46 years