Problem Set-Bond Valuation Problemsasdad

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Larry Schrenk, Instructor

Problem Set: Bond Valuation Problems


(Solutions Below)

Bond Valuation Problems

1. What is the price of the following bond?

face value: $1,000

maturity: 10 years

coupon rate: 8%

discount rate: 9%

2. What is the price of the following bond?

face value: $1,000

maturity: 50 years

coupon rate: 10%

discount rate: 12%

3. What is the value of the following semi-annual bond?

face value: $1,000


maturity: 10 years

coupon rate: 10%

discount rate: 9%

4. What is the value of the following semi-annual bond?

face value: $1,000

maturity: 9.5 years

coupon rate: 7%

discount rate: 7%

5. What is the value of the following semi-annual bond?

face value: $1,000

maturity: 20 years

coupon rate: 9%

discount rate: 10%

6. What is the price of the following quarterly bond?

face value: 1,000

maturity: 10 years

coupon rate: 10%

discount rate: 8%

7. What is the price of the following semi-annual bond?

face value: $1,000

maturity: 10 years
coupon rate: 8%

discount rate: 9%

Solutions

1.

2.

3.

4.

Since coupon rate = discount rate, this must be a par value


bond, and the price is $1,000, or…

5.
6.

7.

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