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 $

Posted Date: 2/27/2013 2:00:33 AM | Location : United States

Ask an Expert

Related Discussions:- Calculate the value of bonds, Assignment Help, Ask Question on Calculate the value of bonds, Get Answer, Expert's Help, Calculate the value of bonds Discussions

Write discussion on Calculate the value of bonds
Your posts are moderated

Write your message here..

Related Questions

What is the internal rate of return of the project, Hydroponics is consider... Hydroponics is considering adding another greenhouse that would cost $95,000 and generate $20,000 in annual net cash flows over its 8 year expected life. What is this project's int

#.agency, agency conflicts and solutions in shareholders vs auditors agency conflicts and solutions in shareholders vs auditors

Calculate profit and loss, On 1 January 2008, a young artist called Michela... On 1 January 2008, a young artist called Michelangelo signed a contract with a charity named Art Angels, which supports young artists to do large projects. The agreement requires M

Accounting for lease, what are the concept of economic substance over legal... what are the concept of economic substance over legal form under accounting for lease?

Excel., prepare an balance sheet prepare an balance sheet

Time value of money, brigham problems brigham problems

Income statement, what is the formulae for calculating Net income? what is the formulae for calculating Net income?

Balance sheet and income statement, Indicate by check mark ("9") or "X" whi... Indicate by check mark ("9") or "X" which accounts are found on the income statement and which accounts are found on the balance sheet.   Account Name In

Investment property, I want to do research on investment property which res... I want to do research on investment property which research topics are appropriate

Calculate total annual interest, Q. Chrissy currently has a credit card tha... Q. Chrissy currently has a credit card that charges 15 percent interest. She usually carries a balance of about $500. Chrissy has received an offer for a new credit card with a tea