# Calculating the present value of a bond, business and finance homework help

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. 4. (calculating the

present value of a bond) If a corporate

bond with a face value of $1,000 has 24 years to go until it matures, has a

coupon interest rate of 5.7% and a yield to maturity (YTM) of 4.201%, what

should be its price in the bond market (ie, PV)?

5. (calculating the

current yield of a bond) If a corporate

bond with a face value of $1,000 has 24 years to go until it matures, has a

coupon interest rate of 5.7% and a market price of $1,223.92, what is its

current yield?

6. (calculating the YTM

of a bond) If a corporate bond with a

face value of $1,000 has 24 years to go until it matures, has a coupon interest

rate of 5.7% and a market price of $1,223.92, what is its yield to maturity

(YTM)?

7. (calculating the YTC

of a bond) Assume a callable corporate

bond with a face value of $1,000, a coupon interest rate of 5.7%, a market

price of $1,223.92, and a call premium of 6%. Assume also that the bond has 24

years to go until it matures, but it is callable after 14 years. What is the

bond’s yield to call (YTC)?

8. (calculating the

present value of a bond with semi-annual coupon interest payments) If a corporate bond with a face value of

$1,000 has 24 years to go until it matures, has a coupon interest rate of 5.7%,

__paid semiannually__, and has a yield to maturity (YTM) of 4.2%, what

should be its price in the bond market (ie, PV)?

9. (calculating the YTM

of a bond with semiannual interest payments)

If a corporate bond with a face value of $1,000 has 24 years to go until

it matures, has a coupon interest rate of 5.7%, paid semiannually, and has a

market price of $1,223.92, what is its yield to maturity (YTM)?

11. Assume the real

risk-free rate is 1%. Assume also that inflation is expected to be 1% in the

coming year (year 1), 2% in the next year after that (year 2), and 3% in the

year after that (year 3). Assume also

that the default risk premium, the liquidity premium, and the maturity risk

premium are 0%. Given these conditions,

what would be the yield on three-year treasury bonds today?

12. Suppose the First

Bank of St Louis was offering the following rates on certificates of deposit

(CDs) this week:

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