Even though most corporate bonds in the United States makecoupon payments semiannually, bonds issued elsewhere often haveannual coupon payments. Suppose a German company issues a bond witha par value of â¬1,000, 10 years to maturity, and a coupon rate of6.4 percent paid annually. If the yield to maturity is 7.5 percent,what is the current price of the bond? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)

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Casey DurganLv2

28 Sep 2019

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Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of 1000, 25 years to maturity, and a coupon rate of 6.4 percent paid annually. If the yield to maturity is 7.5 percent, what is the current price of the bond?

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Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 11 percent, has a YTM of 9 percent, and has 11 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a coupon rate of 9 percent, has a YTM of 11 percent, and also has 11 years to maturity. The bonds have a $1,000 par value.

What is the price of each bond today? (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)


Price of Bond X	$
Price of Bond Y	$

If interest rates remain unchanged, what do you expect the price of these bonds to be one year from now? In two years? In seven years? In 9 years? In 11 years? (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)

Price of bond	Bond X	Bond Y
One year	$	$
Two years	$	$
Seven years	$	$
9 years	$	$
11 years	$	$

Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 10 percent, has a YTM of 8 percent, and has 20 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a coupon rate of 8 percent, has a YTM of 10 percent, and also has 20 years to maturity. The bonds have a $1,000 par value.

What is the price of each bond today? (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)


Price of Bond X	$
Price of Bond Y	$

If interest rates remain unchanged, what do you expect the price of these bonds to be one year from now? In ten years? In fifteen years? In 19 years? In 20 years? (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)

Price of bond	Bond X	Bond Y
One year	$	$
Ten years	$	$
Fifteen years	$	$
19 years	$	$
20 years	$	$

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