1. Calculate the price of a 7 year note, if the coupon rate is 14% and the ytm is 10%. Show formula and work.
2. We have a 10%, 25 year bond, which sells for $1100. If the firm has the right to call it back after16 years at par plus half a year’s coupon. Compute the YTM and the YTC. Which will the investor attain? please show work and formula.
3. We buy a 10 , 7% bond when rates are 12% and sell it when they are 16% in8 years. What is the price we sell it at and buy it at? Please show formula and work.