« previous next »

Author Question: Fifteen years ago TravelEasy Inc. issued twenty-five-year 10 annual coupon bonds with a 1,000 face ... (Read 106 times)

kfurse

  • Hero Member
  • *****
  • Posts: 590
on: Jul 10, 2018
Fifteen years ago TravelEasy Inc. issued twenty-five-year 10 annual coupon bonds with a 1,000 face value each. Since then, interest rates in general have fallen and the yield to maturity on the firm's bonds is now 6.
 
  Given this information, what is the price today for a TravelEasy bond?
  A) 1,000
  B) 1,294.40
  C) 1,091.08
  D) 914.41

Question 2

Twenty years ago JeffCo Inc. issued thirty-year 9 annual coupon bonds with a 1,000 face value each. Since then, interest rates in general have risen and the yield to maturity on the firm's bonds is now 11.
 
  Given this information, what is the price today for a bond from this issue?
  A) 1,000
  B) 1,116.54
  C) 882.22
  D) 914.41


efwsefaw

  • Sr. Member
  • ****
  • Posts: 351
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: B
Explanation: B)
Bond Price = PMT  +
MODE = END
INPUT 10 6 0 -100 -1,000
KEY N I/Y PV PMT FV
CPT 1,294.40

Answer to Question 2

Answer: C
Explanation: C)
Bond Price = PMT  +
MODE = END
INPUT 10 11 0 -90 -1,000
KEY N I/Y PV PMT FV
CPT 882.22


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

The familiar sounds of your heart are made by the heart's valves as they open and close.

Did you know?

The liver is the only organ that has the ability to regenerate itself after certain types of damage. As much as 25% of the liver can be removed, and it will still regenerate back to its original shape and size. However, the liver cannot regenerate after severe damage caused by alcohol.

Did you know?

The average person is easily confused by the terms pharmaceutics and pharmacology, thinking they are one and the same. Whereas pharmaceutics is the science of preparing and dispensing drugs (otherwise known as the science of pharmacy), pharmacology is the study of medications.

Did you know?

Oliver Wendell Holmes is credited with introducing the words "anesthesia" and "anesthetic" into the English language in 1846.

Did you know?

As of mid-2016, 18.2 million people were receiving advanced retroviral therapy (ART) worldwide. This represents between 43–50% of the 34–39.8 million people living with HIV.

Changes in boreal forest composition along a chronosequence in Quebec. Dates refer to the year of th Changes in boreal forest composition along a chronosequence in Quebec. Dates refer to the year of th
Atmospheric CO2 Concentrations Increased Very Rapidly during the Last 200 Years Atmospheric CO2 Concentrations Increased Very Rapidly during the Last 200 Years
Apply fascial mobilization in one direction using a palm. Stand to the side of the face cradle; ... Apply fascial mobilization in one direction using a palm. Stand to the side of the face cradle; ...
Amide carbonyl and Amide bonds Amide carbonyl and Amide bonds
The average weight gain between Thanksgiving and New Year's Day is about a pound The average weight gain between Thanksgiving and New Year's Day is about a pound
Charlie Stone wants to retire in 30 years, and he wants to have an annuity of $1000 a year for ... Charlie Stone wants to retire in 30 years, and he wants to have an annuity of $1000 a year for ...
Video: Neural regulation of blood pressure - baroreceptor and chemoreceptor reflexes

For a complete list of videos, visit our video library