Bonds
Choose the bonds with different maturities, different coupon payments, and so on.
1. Copy the bonds quotations into your project.
2. What were the last prices of the bonds (from the Last Sale column)? What does this price mean?
3. Assume the par value of the bond is $1,000.
a. How much will an investor pay for a bond purchased at the price listed in the
Last Sale column?
b. Calculate the annual coupon interest payments.
Show your work in your project.
4. The YTM is listed in quotations of the bonds (in the Last Sale column, Yield). What
does it mean? (No calculations are required for this section.)
5. Calculate the Macaulay duration and modified duration of these bonds. Use an
online duration calculator. Present the results of your calculations in your project.
How will changes in interest rates affect the bonds’ prices?
6. Using the forecast of interest rates (short-term and long-term) that you found in
Stage 1 of the project, create a forecast of the bonds’ prices. Explain your results.
7.Write at least two pages of analysis of the bonds. Answer the following questions, explaining each answer.
a. If you are going to buy a bond, which bond would you choose? Why?
b. What connections are there among economic trends analysis, bond market
performance, and investment decisions? Discuss these connections.
c. Look at the balance sheet and income statement of the companies. What
data or ratios support your decision to buy this bond or not?
