What is the yield

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1. Toby Imports issued 17 year bonds 2 years ago at a coupon rate of 10.3 percent. The bonds make semiannual payments. These bonds currently sell for 102 percent of par value. What is the yield?

2. Keyser Materials has 8 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 102 percent of par. What is the current yield on Keyser Materials bonds? The YTM? The effective annual yield.

3. Jason Greg is a recent retiree who is interested in investing some of his savings in corporate bonds. Listed below is the bond he is considering adding to his portfolio.
Bond B has a 10% semiannual coupon, matures in 12 years, and has a $1000 face value.
Bond has a YTM of 10%
a. Before calculating the prices of the bonds, indicate whether each bond is trading at a premium, discount of par.
b. Calculae the price of each of this bond.
c. Calculate the current yield for each bond.
d. If the yield to maturity for the bond remains at 9%, what will be the price of the bond 1 year from now?

4. Price each bond and explain how the number of years to maturity and the coupon rate affect the current price of bonds. Assume YTM of 7%.
1. A 4-year bond with a 9% annual coupon
2. A 4-year bond with a zero coupon

Reference no: EM13324653

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