Disc wk 4
. Describe the main elements of the bond:
Coupon rate
Calculate annual coupon payment (assuming face value $1,000)
What is the frequency of coupon payments of the bond? If the frequency is greater than 1, how much is payment is going to be?
Maturity,
Rating. Explain the meaning of rating.
The last price listed in quotation
How much the investor would pay for the bond assuming $1,000 face value and using the last price listed in quotation?
Calculate the current yield of the bond assuming that par value of the bond is $1,000
How much is the YTM listed in quotations is for the bond? Explain the meaning of YTM.
Is the bond callable or not? If the bond that you chose is callable (non-callable), will it change your decision to buy it?
