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    2.-Tutorial-Bonds S1 2020.21

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    Lâm Thanh Huyền Nguyễn
    This document provides examples of bond pricing calculations. It includes tutorials on calculating bond prices given the coupon rate, years to maturity, yield to maturity, and whether the bond is trading at a premium or discount. For example, it shows that a bond with a 7.5% coupon, 10 years to maturity, and 8.75% yield to maturity would have a price of $928.89. It also provides examples of calculating future bond prices if interest rates remain unchanged or change by 2%.

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    2.-Tutorial-Bonds S1 2020.21

    Uploaded by

    Lâm Thanh Huyền Nguyễn
    57 views1 page
    This document provides examples of bond pricing calculations. It includes tutorials on calculating bond prices given the coupon rate, years to maturity, yield to maturity, and whether the bond is trading at a premium or discount. For example, it shows that a bond with a 7.5% coupon, 10 years to maturity, and 8.75% yield to maturity would have a price of $928.89. It also provides examples of calculating future bond prices if interest rates remain unchanged or change by 2%.

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    2.-TUTORIAL-BONDS_S1_2020.21

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    This document provides examples of bond pricing calculations. It includes tutorials on calculating bond prices given the coupon rate, years to maturity, yield to maturity, and whether the bond is trading at a premium or discount. For example, it shows that a bond with a 7.5% coupon, 10 years to maturity, and 8.75% yield to maturity would have a price of $928.89. It also provides examples of calculating future bond prices if interest rates remain unchanged or change by 2%.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    57 views1 page

    2.-Tutorial-Bonds S1 2020.21

    Uploaded by

    Lâm Thanh Huyền Nguyễn
    This document provides examples of bond pricing calculations. It includes tutorials on calculating bond prices given the coupon rate, years to maturity, yield to maturity, and whether the bond is trading at a premium or discount. For example, it shows that a bond with a 7.5% coupon, 10 years to maturity, and 8.75% yield to maturity would have a price of $928.89. It also provides examples of calculating future bond prices if interest rates remain unchanged or change by 2%.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    1

    TUTORIAL: BONDS
    1. Textbook: 1, 2, 3, 4, 5, 7, 9, 11, 12, 13, 14, 15, 16, 17, 21, 23, 25, 26,

    2. Staind, Inc., has 7.5 percent coupon bonds on the market that have 10 years left to
    maturity. The bonds make annual payments. If the YTM on these bonds is 8.75
    percent, what is the current bond price? Assuming the par value of Staind, Inc.
    bonds is $1,000. ($928.89)
    3. Grohl Co. issued 11-year bonds a year ago at a coupon rate of 6.9 percent. The
    bonds make semiannual payments. If the YTM on these bonds is 7.4 percent, what
    is the current bond price? Assuming the par value of Grohl Co. bonds is $1,000.
    ($965.10348) t=10 years
    4. Ashes Divide Corporation has bonds on the market with 14.5 years to maturity, a
    YTM of 6.8 percent, and a current price of $924. The bonds make semiannual
    payments. What must the coupon rate be on these bonds, assuming the par value of
    Ashes Divide Corporation bonds is $1,000? (coupoun rate = 5.97%)
    5. Bond X is a premium bond making annual payments. The bond pays an 8 percent
    coupon, has a YTM of 6 percent, and has 13 years to maturity. Bond Y is a discount
    bond making annual payments. This bond pays a 6 percent coupon, has a YTM of 8
    percent, and also has 13 years to maturity. If interest rates remain unchanged, what
    do you expect the price of these bonds to be one year from now? In three years? In
    eight years? In 12 years? Assuming the par value of these bonds is $1,000.

    P1 => 12 years => $1167.68

    P3 => 10 years => $1147.2

    P12 => 1 years => $1018.87

    P8 => 5 years => $1084.25

    6. Both Bond C and Bond D have 9 percent coupons, make semiannual payments, and
    are priced at par value. Bond C has 3 years to maturity, whereas Bond D has 20
    years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage
    change in the price of Bond C? Of Bond D? If rates were to suddenly fall by 2
    percent instead, what would the percentage change in the price of Bond C be then?
    Of Bond D? Assuming the par value of both bonds is $1,000.

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