QY FIN300 HW3

You purchase to settle October 21, 2020 a $17,000 semi-annual 15.000% bond issued May 25, 2015 and maturing May 25, 2034. The bond is priced to yield 1.875%. Your first coupon payment of $

$ 1275 will be due on Apr 21,2021 (mmm d, yyyy)

You have a $5,000 semi-annual 13.000% bond maturing in exactly 30 years. If the bond is quoted at 384.9788 then the purchase price of the bond is

$ 19248.94 and the yield to maturity is 3.368

You purchase to settle October 19, 2017 a $1,000 semi-annual 12.625% bond issued September 14, 2015 and maturing September 14, 2032. The bond is priced to yield 4.625%. Your first coupon payment of $

$ 630125 will be due on Apr 19,2018 (mmm d, yyyy)

"Promised Yield to Maturity" is interest income as a percent of the purchase price.

F

The term "Yield Illusion" refers to the event of default on the bond, where the borrower does not repay the principal and there is no yield to the investor.

F

You have a 11.750% $10,000 bond maturing May 21, 2030. You purchase the bond to settle May 21, 2021 when yields are 11.250% The purchase price of this bond is thus

NOT $ 101.54

You have a $12,000 semi-annual 11.000% bond maturing in exactly 14 years. If it is priced to yield 11.250% then the bond has a market value of

NOT $ 6176.62 and the income yield is 21.402 %

The price of a 5% coupon, semi-annual payment bond bought exactly 4 years to maturity to yield 4% is

NOT 1036.63

The present value of the principal component of a $10,000 24 month 3.875% Treasury Note is quoted at 92.375. The 24 month zero coupon yield is thus

NOT : 98.465 %

When a debt instrument is classified as "Discount Paper", it means that the note is purchased for less than its principal value, that the principal value is paid at the maturity date, and that the difference in the two amounts is the amount of interest earned.

NOT The base price of the bond is $ 773000.00 Accrued Interest adds $ 122.22 The Invoice Price is thus $ 773122.22

When a debt instrument is classified as "Discount Paper", it means that the note is purchased for less than its principal value, that the principal value is paid at the maturity date, and that the difference in the two amounts is the amount of interest earned.

T

You purchase a $17,000 Bristow 11.875% coupon bond maturing January 16, 2030. The bond is priced to yield 8.125% and settles July 29, 2015.

The base price of the bond is $ 20460.26 Accrued Interest adds $ 3644.97 The Invoice Price is thus $ 24105.23