1. Red Cedar Corporation has issued a bond with the following characteristics:
Par: $1,000
Time to maturity: 25 years
Coupon rate: 7%
Semiannual payments
Calculate the price of this bond if the YTM is:
7%
9%
5%
2. Hollin Corporation has bonds on the market with 12.5 years to maturity, a YTM of 7.3 percent, and a current price of $1,040. The bonds make semiannual payments. What must the coupon rate on these bonds?
3. What is the price of a zero coupon bond with 20 years to maturity paying $1,000 at maturity if the YTM is:
5%
10%
15%
4. Watters Umbrella Corp. issued 15 year bonds two years ago at a coupon rate of 6.8 percent. The bonds make semiannual payments. If these bonds currently sell for 105 percent of par value, what is the YTM?
5. You purchase a bond with a coupon rate of 8.2 percent and a clean price of $1,060. If the next semiannual coupon payment is due in four months, what is the invoice price?
6. You can find current bond prices at: https://finra-markets.morningstar.com/BondCenter/
You want to find the bond prices and yields for bonds issued by Georgia Pacific. You can enter the ticker symbol “GP” to do a search. What is the shortest maturity bond issued by Georgia Pacific that is outstanding? What is the longest maturity bond? What is the credit rating for Georgia Pacific’s bonds? Do all of the bonds have the same credit rating? Why do you think this is?
Please show your complete calculations for the purpose of partial credit.