Question 3 Bond T is a 10% coupon bond, with 11 years to maturity. Interest is paid semi-annually. The current yield- to

[answerhappygod]

Question 3 Bond T Is A 10 Coupon Bond With 11 Years To Maturity Interest Is Paid Semi Annually The Current Yield To 1 (22.68 KiB) Viewed 9 times

Hi there, can you please answer these parts showing the stepstaken in a clear way. Will give upvote. Thanks
Question 3 Bond T is a 10% coupon bond, with 11 years to maturity. Interest is paid semi-annually. The current yield- to-maturity/required return is 7%. Required: a) What is the current price of Bond T? b) If interest rates suddenly rise by 2%, what will be the price of Bond T? c) What does this tell you about the relationship between bond prices and interest rates? Question 4 The National Insurance Property Development Company Limited ("NIPDEC") proposes to raise $1 billion through the issue of a 16-year bond with a fixed coupon rate of 4.00%. The bond will be issued on October 23, 2013 and matures on October 23, 2029. Coupon payments will be made semi-annually. a) If you are interested in investing in this bond on October 23, 2013, but the current environment dictates a market return/yield to maturity of 3.75%. What price will you be willing to pay for $1,000 par value of this bond? b) Assume the bond is priced at $975.00 on October 23, 2016, 3 years after issue. What is the YTM based on this price? c) Calculate the current yield on the bond based on the price of $975.