Planit:Bond Calculator Exercise Answer Key

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Canada English

Question 1: Joe Drummer is considering buying a bond with a maturity value of $1,000 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at $900? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of $2,000 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at $1,500? Purchase Value =$_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter $900, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as $1,000, and the Maturity Date as 15 years from today’s date. Enter the current market price of $900 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.614% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter $1,500. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as $2,000, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be $1,687.58

United States of America

Question 1: Joe Drummer is considering buying a bond with a maturity value of $1,000 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at $900? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of $2,000 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at $1,500? Purchase Value =$_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter $900, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as $1,000, and the Maturity Date as 15 years from today’s date. Enter the current market price of $900 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.614% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter $1,500. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as $2,000, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be $1,687.58

Argentina

Question 1: Joe Drummer is considering buying a bond with a maturity value of $3 800 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at $3 400? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of $7 700 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at $5 700? Purchase Value =$_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter $3 400, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as $3 800, and the Maturity Date as 15 years from today’s date. Enter the current market price of $3 400 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.635% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter $5 700. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as $7 700, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be $6 683.98

Brazil

Question 1: Joe Drummer is considering buying a bond with a maturity value of R$71 900 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at R$64 700? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of R$143 800 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at R$107 900? Purchase Value =R$_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter R$64 700, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as R$71 900, and the Maturity Date as 15 years from today’s date. Enter the current market price of R$64 700 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.615% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter R$107 900. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as R$143 800, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be R$125 419.42

United Kingdom

Question 1: Joe Drummer is considering buying a bond with a maturity value of £600 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at £500? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of £1 200 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at £900? Purchase Value =£_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter £500, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as £600, and the Maturity Date as 15 years from today’s date. Enter the current market price of £500 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.892% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter £900. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as £1 200, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be £1 046.44

Russia

Question 1: Joe Drummer is considering buying a bond with a maturity value of руб.30 000 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at руб.27 000? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of руб.60 000 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at руб.45 000? Purchase Value =руб._____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter руб.27 000, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as руб.30 000, and the Maturity Date as 15 years from today’s date. Enter the current market price of руб.27 000 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.614% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter руб.45 000. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as руб.60 000, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be руб.52 322.23

China

Question 1: Joe Drummer is considering buying a bond with a maturity value of ¥6 500 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at ¥5 800? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of ¥13 000 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at ¥9 700? Purchase Value =¥_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter ¥5 800, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as ¥6 500, and the Maturity Date as 15 years from today’s date. Enter the current market price of ¥5 800 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.645% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter ¥9 700. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as ¥13 000, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be ¥11 316.01

Malaysia

Question 1: Joe Drummer is considering buying a bond with a maturity value of RM3 000 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at RM2 700? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of RM6 000 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at RM4 500? Purchase Value =RM_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter RM2 700, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as RM3 000, and the Maturity Date as 15 years from today’s date. Enter the current market price of RM2 700 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be % Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter RM4 500. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as RM6 000, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be RM10.614

Singapore

Question 1: Joe Drummer is considering buying a bond with a maturity value of S$1 300 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at S$1 200? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of S$2 600 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at S$1 900? Purchase Value =S$_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter S$1 200, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as S$1 300, and the Maturity Date as 15 years from today’s date. Enter the current market price of S$1 200 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.525% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter S$1 900. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as S$2 600, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be S$5 232.22

Hong Kong

Question 1: Joe Drummer is considering buying a bond with a maturity value of HK$7 500 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at HK$6 800? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of HK$15 000 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at HK$11 300? Purchase Value =HK$_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter HK$6 800, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as HK$7 500, and the Maturity Date as 15 years from today’s date. Enter the current market price of HK$6 800 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.588% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter HK$11 300. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as HK$15 000, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be HK$13 101.03

India

Question 1: Joe Drummer is considering buying a bond with a maturity value of 44 100 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at 39 700? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of 88 200 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at 66 200? Purchase Value =_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter 39 700, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as 44 100, and the Maturity Date as 15 years from today’s date. Enter the current market price of 39 700 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.613% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter 66 200. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as 88 200, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be 76 934.15

Caribbean

Jamaica   Question 1: Joe Drummer is considering buying a bond with a maturity value of J$82 500 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at J$74 300? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of J$165 000 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at J$123 800? Purchase Value =J$_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter J$74 300, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as J$82 500, and the Maturity Date as 15 years from today’s date. Enter the current market price of J$74 300 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.612% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter J$123 800. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as J$165 000, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be J$143 906.61 Trinidad and Tobago   Question 1: Joe Drummer is considering buying a bond with a maturity value of TT$6 100 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at TT$5 500? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of TT$12 200 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at TT$9 200? Purchase Value =TT$_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter TT$5 500, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as TT$6 100, and the Maturity Date as 15 years from today’s date. Enter the current market price of TT$5 500 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.608% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter TT$9 200. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as TT$12 200, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be TT$10 659.33 Barbados   Question 1: Joe Drummer is considering buying a bond with a maturity value of Bds$1 900 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at Bds$1 700? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of Bds$3 900 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at Bds$2 900? Purchase Value =Bds$_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter Bds$1 700, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as Bds$1 900, and the Maturity Date as 15 years from today’s date. Enter the current market price of Bds$1 700 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.635% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter Bds$2 900. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as Bds$3 900, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be Bds$3 390.71 Bermuda   Question 1: Joe Drummer is considering buying a bond with a maturity value of BD$1 000 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at BD$900? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of BD$1 900 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at BD$1 500? Purchase Value =BD$_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter BD$900, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as BD$1 000, and the Maturity Date as 15 years from today’s date. Enter the current market price of BD$900 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.614% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter BD$1 500. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as BD$1 900, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be BD$1 687.58 Bahamas   Question 1: Joe Drummer is considering buying a bond with a maturity value of B$1 000 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at B$900? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of B$1 900 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at B$1 500? Purchase Value =B$_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter B$900, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as B$1 000, and the Maturity Date as 15 years from today’s date. Enter the current market price of B$900 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.614% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter B$1 500. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as B$1 900, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be B$1 687.58 Puerto Rico   Question 1: Joe Drummer is considering buying a bond with a maturity value of $1,000 and a 15-year term to maturity, as soon as it is issued. The bond pays a coupon rate of 10% compounded semi-annually. What is the yield to maturity if the bond is priced at $900? Yield to Maturity =_____ % Question 2: Your client bought a bond two years after it was issued, with a maturity value of $2,000 and a 10-year term. The bond pays a coupon rate of 8%, compounded annually, with a yield to maturity of 8.5%. What was the purchase value if the bond was originally priced at $1,500? Purchase Value =$_____ Answer 1 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates Select the Compound Frequency as semi-annual. Select the semi-annual option under the drop-down list for Payment Frequency In the Par Value field enter $900, since the face value (initial value of the bond when it is issued) and purchase value (price when he would buy the bond) will be the same. Enter today’s date as the Issue Date Note: The exact date the bond is issued or comes to maturity are not necessary, as long as the time difference between the Par, Face and Maturity values are relevant. In the Coupon Rate field enter 10% Enter the Maturity Value as $1,000, and the Maturity Date as 15 years from today’s date. Enter the current market price of $900 in the Purchase Value field In the Purchase date field enter today’s date again: the date the client would purchase the bond (in this case the same as the Issue Date). Click on the Yield button next to Yield to Maturity. The result should be 10.614% Answer 2 Select Bond Calculator from the Calculators drop-down menu on the Home page. Click on the Radio button to indicate Current Rates The Compound Frequency can be set to annual. Select the annual option under the drop-down list for Payment Frequency In the Par Value field enter $1,500. Enter the Issue Date as two years ago. In the Coupon Rate field enter 8% Enter the Maturity Value as $2,000, and the Maturity Date as 10 years from the issue date. Leave the Purchase Value field blank for now since this is what we are calculating for. In the Purchase date field enter today’s date. Enter the Yield as 8.5%. Click on the Purchase button next to the Purchase Date field. The result should be $1,687.58

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