Determine the yield rate j, using the method of averages. Face Value Redemption at Bond Interest Years to Redemption Purchase Price 5000 101 ji = 11.5% 4 4800
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- What equation was used to get the Aftertax Cost of Debt? Debt Face Value 1000 Bond Price 1271.59 Coupon Payment 75 Maturity 50 Yield to Maturity 11.64% Aftertax Cost of Debt 9.31%This first table describes prevailing market interest rates. Market Data Yield 0.05 Required: Using the yield above and the information contained in the table below, please calculate the price and duration of the bond as well as all necessary steps. (Use cells A5 to B5 from the given information to complete this question.) Time Until Payment Payment Discounted Payment Weight Time × Weight 1.00 $30.00 2.00 $30.00 3.00 $30.00 4.00 $1,030.00 Price: Durationfinancial risk management Assume you have the following asset and liability in your Balance Sheet:Asset - Bond AModified Duration = 2.6 yearsValue= RM1.5 millionLiability - Bond BModified Duration = 3.1 yearsValue= RM1.0 million a. Calculate the duration gap.
- Based on Table 3, what is the liquidity risk premium? Table 3 Investment 1 2 3 4 5 O 1.25% O 1.50% O 0.25% O 1.12% Maturity 2 2 7 8 8 Liquidity High Low Low High Low Default Risk Low Low Low Low High Interest Rate 1.00% 1.25% 2.25% 2.93% 4.43%Consider the following money market information being quoted: Which of the following statements is true? Particulars GBP Interest Rate THB Interest Rate Spot Rate 1-year Expected Spot Rate Bid Rate 6.100% 10.550% THB5.6601/GBP THB5.9037/GBP C. Ask Rate 6.125% 10.625% THB5.6622/GBP THB5.9961/GBP a. There is an arbitrage which can only be made by initially borrowing GBP and then investing in THB. b. More than one of the options in this question are correct. The THB is selling at a premium to the GBP in the future. O d. There is an arbitrage which can only be made by initially borrowing THB and then investing in GBP.Given the following data: Period Years to maturity Yield Par Value (K) Bond Price (K) 1 0.5 8.0% 1,000 1,000 2 1 8.05% 1,000 1,000 3 1.5 8.1% 1,000 1,000 4 2 8.12% 1,000 1,000 5 2.5 8.22% 1,000 1,000 Determine the spot rates for 6-months, 1 year, 1.5 years, 2 years and 2.5 years.
- Using the table below, Compute the convexity measure (in years) for bond 2 Bond 1 Bond 2 Coupon Yield to maturity Maturity (in years) Par value 6% 7% 6% 6% 4 $100 $100 $100 $108 Price O A. 14.763 12.652 OC. 13.312 OD. 13.927B. Find the annual interest and maturity/yield rate. FACE VALUE COUPON RATE ANNUAL PRESENT VALUE MATURITY/YIELD RATE INTEREST 5. P1,000.00 3% P850 6. P600,000.00 5% P630,000.00(Trade Credit Discounts) Determine the effective annualized cost of forgoing the trade credit discount on the following terms: 1/10, net 20 2/10, net 30 Common Stock A Common Stock B Probability Return Probability Return .30 11% .20 25% .40 15% .30 6% .30 19% .30 14% .20 22%
- Real risk-free rate (r") = 3.0% Expected inflation rates: Year 1 = 3.0 % , Year 2-3.5%, Year 3 = 4.0%, Year 4- 4.0%, Year 5 and after = 4.5% - Liquidity premium (LP) - 0.5% IM Maturity risk premium (MRP) = 0.05 x (t-1)% Default risk premium (DRP) = 2.5% What is the corporate bond yield spread? 3.50% O 3.00% 2.45% 5.5%Part 1: Consider the following note that pays coupons on a semi-annual basis. Note matures 8/15/2031 with a coupon rate of 4.75%. Settlement date is 12/15/2023 and the quoted price is 102-7 (percent of par with fraction in 32nds). ● ● you 1) Use the YIELD function in Excel to calculate the Yield to Maturity. Verify in Excel that calculated the right yield by adding up the discounted individual cash flows with the result from the YIELD function (use 30/360 day count).Data table ↑ The current zero-coupon yield curve for risk-free bonds is as follows: What is the price per $100face value of a two-year, zero-coupon, risk-free bond? The price per $100 face value of the two-year, zero-coupon, risk-free bond is $ (Click on the following icon in order to copy its contents into a spreadsheet.) Maturity (years) YTM 1 4.98% 2 5.48% 3 5.78% Print Done 4 5 5.96% 6.09% (Round to the nearest cent.) - X