1) Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 20 years to maturity, and a coupon rate of 7.8 percent paid annually.
If the yield to maturity is 8.9 percent, what is the current price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
2) A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par value. The bond has a coupon rate of 6 percent paid annually and matures in 16 years.
What is the yield to maturity of this bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
3) Say you own an asset that had a total return last year of 12 percent. If the inflation rate last year was 7.5 percent, what was your real return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
4) Locate the Treasury issue in Figure 7.4 maturing in February 2041. Assume a par value of $10,000.
What is its coupon rate? (Enter your answer as a percent rounded to 3 decimal places, e.g., 32.161.)
What is its bid price in dollars? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
What was the previous day’s asked price in dollars? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)