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    Bond Valuation Exam 1

    Uploaded by

    Ronah Abigail Bejoc
    This document contains 10 questions about bond valuation, including calculating bond prices given information about the face/par value, coupon rate, maturity date, yield/discount rate, and whether coupon payments are made annually or semi-annually. The questions cover a range of scenarios involving bonds with different characteristics.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Bond Valuation Exam 1

    Uploaded by

    Ronah Abigail Bejoc
    183 views2 pages
    This document contains 10 questions about bond valuation, including calculating bond prices given information about the face/par value, coupon rate, maturity date, yield/discount rate, and whether coupon payments are made annually or semi-annually. The questions cover a range of scenarios involving bonds with different characteristics.

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    © © All Rights Reserved

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    PDF, TXT or read online from Scribd

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    This document contains 10 questions about bond valuation, including calculating bond prices given information about the face/par value, coupon rate, maturity date, yield/discount rate, and whether coupon payments are made annually or semi-annually. The questions cover a range of scenarios involving bonds with different characteristics.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    183 views2 pages

    Bond Valuation Exam 1

    Uploaded by

    Ronah Abigail Bejoc
    This document contains 10 questions about bond valuation, including calculating bond prices given information about the face/par value, coupon rate, maturity date, yield/discount rate, and whether coupon payments are made annually or semi-annually. The questions cover a range of scenarios involving bonds with different characteristics.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    1.

    What is the price of a 5-year bond with a nominal value of $100, a yield to maturity of 7% (with annual
    compounding frequency), a 10% coupon rate and an annual coupon frequency?

    2. We consider the following coupon curve:


    Number of Years Rate (%)

    What is the price of a 5-year bond with a


    $100 face value, which delivers a 5%
    annual coupon rate?

    3. A $1,000 par value, 12-year annual bond carries a coupon rate of 7%. If the current yield of this bond is
    7.995%, its market price to the nearest dollar is

    4. The par value of 10% debenture is $1,000 with maturity is 3 years. What would be the price if interest
    rate is (a) 12%, (b) 10% and (c) 8%?

    5. Irredeemable bond paying coupon of $10 per annum has an average annual discount rate 6%.
    Coupons are paid semi-annually, what is the price of this bond for the year?

    6. HuSenYan Co is Public Limited Company. The company board of director was decided to offer 1,000
    no. of bonds of par value of $10 each in 2004; carrying 15 percent coupon rate and 5 year maturity
    period, bond would mature in 2009. The discount rate in first year (2005) was 10 percent. The rate was
    same in 2006. After that market rate of return had increased to 14 % in 2007. Under rising inflation and
    political instability the rate further jumped to 16 percent in 2008. We are in 2009 year and expected that
    market rate will remain 12 percent in this year and market value of bonds will be 9 per bond (1,000
    bonds). What will be present value of bond?

    7. What is the value of the following semi-annual bond?


    face value: $1,000
    maturity: 9.5 years
    coupon rate: 7%
    discount rate: 7%
    8. What is the value of the following semi-annual bond?
    face value: $1,000
    maturity: 20 years
    coupon rate: 9%
    discount rate: 10%
    9. What is the price of the following quarterly bond?
    face value: 1,000
    maturity: 10 years
    coupon rate: 10%
    discount rate: 8%
    10. What is the price of the following semi-annual bond?
    face value: $1,000
    maturity: 10 years
    coupon rate: 8%
    discount rate: 9%

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