Question

Saved Problem 3-6 Bond prices and yields A 23-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 5.25% (2.625% of face value every six months). The reported yield to maturity is 5.0% (a six-month discount rate of 5.0/2 = 2.5%). 25 a. What is the present value of the bond? b. If the yield to maturity changes to 1%, what will be the present value? c. If the yield to maturity changes to 8%, what will be the present value? d. If the yield to maturity changes to 15%, what will be the present value? (For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places.) es Present value $ s b. Present value c. Present value d. Present value 1,065.63 1,869.37 714.80 376.11 $ $

Answer 1

А В 1 а. $1,033.94 2 b. $1,871.30 $712.84 4 d. | $373.34 3 с.

calc:

A 1 a. 2 b. B =PV(5%/2,23*2,-5.25%/2*1000,-1000) =PV(1%/2,23*2,-5.25%/2*1000,-1000) =PV(8%/2,23*2,-5.25%/2*1000,-1000) =PV(15%/2,23*2,-5.25%/2*1000,-1000) 3 C. 4 d.