Equity and Fixed Income Securities

Competency

Evaluate equity and fixed income securities.

Instructions

You have just completed your first training for the new class of interns at your employer, Bank of Wealth Investment Brokers. Part of your role as the new Portfolio Analyst is to train the new research interns on all of the facets of investing. You have now been asked to solve some time value of money problems in Excel for use with the interns.

You will need to use this Excel spreadsheet and solve the following problems. In addition, you can find extra Excel resources by using this link.

  1. The Piedmont Flyers have issued a 30-year bond with a face value of $1000 and a 5% coupon rate. The market is yielding 7%, what is the current selling price of the bond?
  2. The Piedmont Flyers have issued a 30-year bond with a face value of $1000 that pays semiannually with a 4% coupon rate. The market is yielding 6%, what is the current selling price of the bond?
  3. The Piedmont Flyers have issued a 8-year bond with a face value of $1000. The price of the bond is $880. The market rate is 10% annually. What is the coupon payment?
  4. The Piedmont Flyers have issued a 30-year bond with a selling price of $750 and a coupon payment of $100. The face value is $1000. What is the return on the bond?
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