Problem Set 4

.pdf
School
University of California, Davis **We aren't endorsed by this school
Course
ARE 171A
Subject
Finance
Date
Oct 21, 2023
Pages
2
Uploaded by AmbassadorFlag12059 on coursehero.com
Problem set 4 # 1(a) q(c)& #4 name; zayeah cochinual (2)p =(1 iy=) 10 yrs. semiannual -> 10.2 = 20 (a) of bordgucled price and see 4 make into a percent 1,0779. 1000: 1077.9 -> price of bold 6%-1000 -> 60 formula Yield No mature: thermoscosmo C-corporate -> 6% 0.66 yield to Maturity (semi-annual) 5.4%. (ii) If bond's XTM changes to 440 APR -> bond's price 5.4. 5, 7 2.7 -> a(- ro+ E 917.9188 1504.855 9/7.92 1504,86 = *2422.78 (i) price of bond expected value in one year: 44,500 96%.1000= $ 980 price of bond = 980 / (H 2%) $ 930.78 (ii) yield to maturity of the bond: 1000 / 960.78 - 1 4.08%. (iii) yield spread: 4.000 10 3.080/.
171 no - problem s7 4 (a) Price & YTM of 3% for bonds A & B, the once is face value of 1,000 04TM of 3% as 4TM 11,000 price of bond $ @3% y(M $ (1,000 old C. Maturity 8 1788.03 orice XTM of 1%, $ 728.45 bonds C & P (cerves), the calculations are shown below -> C S1000/(1.81S3) $ 788.VS (b) -> P + (000 / (1.01s(0) Godd A - @XTM 1 1 (1.021 1)/10.02.1.02) = 9321) bond p -> (1.028 1) (0.02.1.028) = $ 963.37 bond ( -> (18000(7.52)" $ 725.4) Bond D- (1000/ (102)9 * 8S3.49 (C) bond A -> 93211 1000 = 6.79% zoed B: -> 963.37 1000 3.66% bund C: -> 728.43 788.63 = - 7.56% bord 1= -> 853.49 887.71 - 3.85% (d) we can see that no change is higher for higher maturities or a specific change is YTM. And the to hange of zerocropan bonds is higher than compre bonds.
Page1of 2
Uploaded by AmbassadorFlag12059 on coursehero.com