# Sinking Fund

Please help. I can’t figure out this anwser. Its in Book 5 of the Schweser: The 10.80% bones of PPL Corp mature on Jan 15, 2019 and currently at 104. It is semi-annual and has a Jan. 25 coupon date. If today is Jan 15 it has a maturity date of 11 years. The bond has a Sinking Fund requirment drawn randomly accordingliny: Years 1-6 (no requirment) year 7 (20%) year 8 (20%) year 9 (20%) year 10 (20%) year 11 (20%). A. - What is the expected yeild to maturity B. - What is the duration and convexity.

Posted on LI and LII forum. Let’s try not to post the same question in multiple forums because we just get odd disconnects on threads. Is this question anything like this important to post on all forums?

Is this a level III question? Book five page what would make it easier to help you out. If it’s not a level III question then answering it won’t help me pass this years exam and, although a bit harsh, i don’t plan on wasting my time figuring out answers to help others pass the LI and LII.

Steingold246 Wrote: ------------------------------------------------------- > Please help. I can’t figure out this anwser. Its > in Book 5 of the Schweser: > > The 10.80% bones of PPL Corp mature on Jan 15, > 2019 and currently at 104. It is semi-annual and > has a Jan. 25 coupon date. If today is Jan 15 it > has a maturity date of 11 years. The bond has a > Sinking Fund requirment drawn randomly > accordingliny: > Years 1-6 (no requirment) year 7 (20%) year 8 > (20%) year 9 (20%) year 10 (20%) year 11 (20%). > > A. - What is the expected yeild to maturity > B. - What is the duration and convexity. Wouldn’t it just be the expected YTM? YTM= .2*YTM7+.2*YTM8+…+.2*YTM11 I’d imagine you could do similar calculations for Duration and Convexity…