Please show me how to solve these 6 Interest Rate and Valuation problems, using the
BAII Plus Professional calculator, if possible. If not, please show me the math work Thanks!
3. P7-5 Coupon Rates [LO2]
Kiss the Sky Enterprises has bonds on the market making annual payments, with 13 years to maturity, and selling for $1,045. At this price, the bonds yield 7.5 percent. What must the coupon rate be on the bonds? |
| 8.15% |
| 7.50% |
| 7.71% |
| 8.05% |
| 16.11% |
13. P7-8 Coupon Rates [LO2]
Ashes Divide Corporation has bonds on the market with 14.5 years to maturity, a YTM of 6.8 percent, and a current price of $924. The bonds make semiannual payments. What must the coupon rate be on these bonds? (Do not round your intermediate calculations.) |
| 12.90% |
| 6.07% |
| 5.97% |
| 11.92% |
| 6.46% |
6. P7-17 Interest Rate Risk [LO2]
Bond J is a 4 percent coupon bond. Bond K is a 12 percent coupon bond. Both bonds have nine years to maturity, make semiannual payments, and have a YTM of 8 percent. |
Requirement 1: |
(a) | If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond J? |
Answer choices: 14.21%, -12.13%, -13.06%, -39.05%, -6.98%
(b) | If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond K? |
Answer choices: -10.26%, -10.88%, 11.89%, 14.42%, 31.36%
Requirement 2: |
(a) If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond J? |
Answer choices: 14.17%, -28.09%, -12.17%, 15.49%, -6.53%
(b) | If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond K? |
Answer choices: 16.85%, -10.30%, 12.72%, 11.85%, 45.69%
38. P7-16 Interest Rate Risk [LO2]
Both Bond Sam and Bond Dave have 9 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 3 years to maturity, whereas Bond Dave has 20 years to maturity. (Do not round your...