| A bond has a par value of $1,000, pays $50 semiannually and has a maturity of 10 years. | |||||||
| If the bond earns 12% per year, what is the price of the bond? | |||||||
| Rate | |||||||
| Nper | |||||||
| PMT | |||||||
| FV | |||||||
| Type | |||||||
| PV | |||||||
| What is the yield to maturity for the bond? | |||||||
| Nper | |||||||
| PMT | |||||||
| PV | |||||||
| FV | |||||||
| Type | |||||||
| Rate | |||||||
| What would be the bond’s price if the rate earned declined to 8% per year? | |||||||
| Rate | |||||||
| Nper | |||||||
| PMT | |||||||
| FV | |||||||
| Type | |||||||
| PV | |||||||
| If the maturity period is reduced to 5 years and the required rate of return is 8%, what would be the price of the bond? | |||||||
| Rate | |||||||
| Nper | |||||||
| PMT | |||||||
| FV | |||||||
| Type | |||||||
| PV | |||||||
| What is the yield to maturity for the bond when the maturity is 5 years and the required rate of return is 8%? | |||||||
| Nper | |||||||
| PMT | |||||||
| PV | |||||||
| FV | |||||||
| Type | |||||||
| Rate | |||||||
| What generalizations about bond prices, interest rates and maturity periods can be made based on the calculations made above? | |||||||
0 comments