1.

Determine the current yield of a bond whose face value is

₱33,200 and pays a yearly of 13.7% if purchased at ₱36,700.

When the price of bond is ₱33,200

0.0137(₱33,200)
Current yield = = 13.7%
₱33,200

When the price of bond is ₱36,700

0.137(₱33,200)
Current yield = = 12.39
₱36,700

2. What is the current yield to bond whose face value is ₱26,200

and pays a yearly interest of 8% if purchased of ₱18,400?

When the price of bond is ₱26,200

0.08(₱26,200)
Current yield = = 8%
₱26,200

When the price of bond is ₱18,400

0.08(₱26,200)
Current yield = = 11.39%
₱18,400
3. Determine the current yield to bond whose face value is
₱17,560 and pays a yearly interest of 8.7% if purchased at
₱16,970?

When the price of bond is ₱26,200

0.087(₱17,560)
Current yield = = 8.7%
₱17,560

When the price of bond is ₱16,970

0.087(₱17,560)
Current yield = = 9%
₱16,970

4. A ₱75,000 at 11% bond pays coupon semiannually redeemable

at ₱90,000 on January 13, 2017 is bought on January 13, 2011
to earn 13% compounded semiannually. Find the purchase
price.

Given V = ₱75,000
r = 11% or 0.11
j = 13% or 0.13
m=2
n = tm = 6(2) = 12
𝑗 0.13
i= = = 0.065
𝑚 2
𝑟
b= = 0.11/2 = 0.045
𝑚
k = Fb = 75,000(0.055) = 4,125
1−(1+𝑖)−𝑛
P = V (1 + 𝑖)𝑛 + K [ ]
𝑖
 1−(1+0.065)−12
p = 75,000 (1 + 0.065)−12 + 4,125 [ ]
0.065
1−(1+0.065)−12
p = 75,000 (1.065)−12 +4,125 [ ]
0.065

p = 75,000 (0.4696828549) + 4,125(8.8386190935)

p = 35,226.2140792499 + 36,459.3037606875
p = 71,685.51

The price of the bond to yield 13% is ₱71,685.51

V = 75,000 (0.11) = 8,250

p = 35,226.2140792499 + 36,459.3037606875
p = 71,685.51

The price of bond is ₱27,529.62