umuc finc330 homework 4D latest june 2016

| June 13, 2018

Homework 4D

Problem 1
Question 1 1
/ 1 point
What is the yield to maturity of a 28-year bond that pays a
coupon rate of 11.64 percent per year, has a $1,000 par value, and is currently
priced at $1,468? Assume annual coupon payments.

Round the answers to two decimal places in percentage form.
(Write the percentage sign in the “units” box).

You should use Excel or financial calculator.

Question 2 1
/ 1 point
Blue Crab, Inc. plans to issue new bonds, but is uncertain
how the market would set the yield to maturity. The bonds would be 14-year to
maturity, carry a 10.11 percent annual coupon, and have a $1,000 par value.
Blue Crab, Inc. has determined that these bonds would sell for $1,393 each.
What is the yield to maturity for these bonds?

Round the answers to two decimal places in percentage form.
(Write the percentage sign in the “units” box).

You should use Excel or financial calculator.

Question 3 1
/ 1 point
Fresh Fruit, Inc. has a $1,000 par value bond that is
currently selling for $823. It has an annual coupon rate of 9.70 percent, paid
semiannually, and has 15-years remaining until maturity. What would the annual
yield to maturity be on the bond if you purchased the bond today and held it
until maturity?

Round the answer to two decimal places in percentage form.
(Write the percentage sign in the “units” box)

You should use Excel or financial calculator.

Question 4 1
/ 1 point
A few years ago, Spider Web, Inc. issued bonds with a 12.04
percent annual coupon rate, paid semiannually. The bonds have a par value of
$1,000, a current price of $827, and will mature in 14 years. What would the
annual yield to maturity be on the bond if you purchased the bond today?

Round the answer to two decimal places in percentage form.
(Write the percentage sign in the “units” box)

You should use Excel or financial calculator.

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