market values of bond and treasury bills

CFA Level I
#1
  1. A co has a $500mill face value long-term bond issue outstanding. The bonds have 8 years until maturity, carry a 9.75% coupon rate payable, semi annually, and are currently pricced with a yield to maturity (YTM) of 11.30%. What is the current market value of the bond issue? a) $459,881 million b) $467,356 million c) $500.000 million d) $722.389million 2. Treasury bills (T-bills) with a face value of $100 and an original maturity date of 182 days were issued 3 months ago at a price of $99, but are currently priced to offer a yield of 3%. What is the current price of the T-bills? a)$97.09 b)$99.27 c)$100.74 d)$103.09
#2
  1. A 2) B
#3

ditto

#4

I should know these cold by now, but would someone mind posting their calculations? Thanks.

#5

1/ N= 8 x 2 = 16 FV=500 PMT=500 x 0.0975 / 2 = 24.375 I/Y= 11.3/2 = 5.65 --> PV = -459.881 ==>A 2/ I did not do any calculation. The bond price 3 months ago was $99 and its maturity (par) value will be $100. So I know the value now will be somewhere between 99 and 100. The only choice is B.

#6

For Q2: D=F*r*(T/360) =100*0.03*(91/360) =0.7583 -> This is the Discount 100-0.7583 = 99.27