Calculate the value of each of the following bond
Issuer

Face Value

Coupon Rate

Maturity

Bid Yield

Bid Price

Japan

100,000,000 ¥

4.100 %

06/04

0.910 %

115.3660

Britain

1,000,000 £

5.750 %

12/09

5.200 %

104.3800

U.S.

1,000,000 $

5.250 %

05/04

5.740 %

97.9375

Calculate the value of each of the above bonds in U.S dollars given the following
Spot ($ / ¥) = 0.008422
Spot ($ / £) = 1.596700
SOLUTION:
The FV of Japan Bond = 100,000,000 ¥
Bid price = 115.3660
Hence Value of Bond = 115,366,000 ¥
Spot conversion rate = 0.008422 ($ / ¥)
Hence Value of Japan bond in US $ is = 115,366,000 * 0.008422 = 971,612.5 $
The FV of Britain Bond = 1,000,000 £
Bid price = 104.38
Hence Value of Bond = 1,043,800 £
Spot conversion rate = 1.5967 ($ / £)
Hence Value of Britain bond in US $ is = 1,043,800 * 1.5967 = 1,666,635 $
The FV of US Bond = 1,000,000 $
Bid price = 97.9375
Hence Value of Bond = 979,375 $
Spot conversion rate = 1 ($ / $)
Hence Value of U.S. bond in US $ is = 979,375 * 1.00 = 979,375 $