Problem 3-05, Treasury offer
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Determine the bond price assuming that coupons are paid semiannually on the treasury offering.
Calculator Preview
Your numbers will vary.
Determine the bond price assuming that coupons are paid semiannually on the treasury offering.
Your numbers will vary.
Determine the present value of the bond at various yields.
Your numbers will vary.
Determine the bond price after one year passes and estimate the investor’s total return who held the bond over the year.
Your numbers will vary.
What rate of return does the bondholder earn over the 12-month period? If bond yields change, what rate return does the bondholder earn in that case?
Your numbers will vary.
Determine the duration of a perpetual bond and zero-coupon bond. Which has a longer duration?
Your numbers will vary.
In the market for U.S. Treasury bonds, what comes first and what comes after? Spot rates, yields, bond prices? How are they related?
Given a list of spot rates, calculate the discount factors, bond prices, and yields to maturity for various bonds. NOTE: They might ask you for 3 bonds, A, B, and C. Just update the top two inputs, the coupon rate and the total years applicable for each bond, and just press update. Do this for A, then B, and finally for C.
Your numbers will vary.
Given coupon rates and yields of two bonds that have the same maturity, compute the spot rate. This solver will also work if they ask you for yield to maturity on a zero-coupon bond, which is the same as the spot rate.
Your numbers will vary.
Determine the shape of the term structure of interest rates given information about yields on high-coupon bonds and low-coupon bonds. Is the term structure upward or downward sloping?
Given estimated spot rates, r1, r2, r3, etc., you are asked to determine the discount factors and bond prices (present values), and yields. You can also infer the spot rate on a 5-year bond (the yield to maturity on a zero-coupon bond)… this solver does it ALL! Check out the preview image to make sure it’ll work for you!
Your numbers will vary.