| Fin
306 |
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| The
Financial Services Industry |
Back to
Assignments and Projects |
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| Valuation
Worksheet
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| Money
Market Instruments |
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| 1.Find the
market values of each of the following T Bills |
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Days to Maturity |
Discount Rate |
Par |
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ANSWER |
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| 1 |
91 |
4.1% |
$ 100 |
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$
98.964 |
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| 2 |
91 |
5.2% |
$ 100 |
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$
98.686 |
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| 3 |
143 |
6.6% |
$ 10,000 |
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$
9,737.833 |
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| 4 |
56 |
6.6% |
$ 10,000 |
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$
9,897.333 |
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| 5 |
364 |
5.5% |
$ 1,000,000 |
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$944,388.889 |
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| 2. Given
the prices of the following T Bills, determine d, y, and y* Assume par = 100 |
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Days to Maturity |
Price |
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d |
y |
y* |
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| 1 |
150 |
98.535 |
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3.52% |
3.62% |
3.66% |
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| 2 |
22 |
99.767 |
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3.81% |
3.87% |
3.95% |
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| 3 |
60 |
99.235 |
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4.59% |
4.69% |
4.78% |
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| 3.
Determine the market values of the following CD's (add-on interest) |
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Days to Maturity |
Annual Rate |
Promised Payment |
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ANSWER |
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| 1 |
90 |
4.0% |
$ 50,500 |
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$
50,000 |
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| 2 |
125 |
6.0% |
$ 12,500 |
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$
12,245 |
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| 3 |
270 |
7.5% |
$ 8,850 |
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$ 8,379 |
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| Bonds |
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| 1.
Determine the prices of the following bonds (face value = $1000) |
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Annual Coupon |
Maturity (Years) |
Annual YTM |
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ANSWER |
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| 1 |
4.0% |
10 |
9.0% |
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$679.12 |
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| 2 |
8.5% |
5 |
12.0% |
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$873.83 |
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| 3 |
0.0% |
15 |
7.6% |
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$333.29 |
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| 2.
Determine the YTM on the following bonds (face value =$1000) |
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Annual Coupon |
Maturity (Years) |
Price |
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ANSWER |
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| 1 |
6.0% |
8 |
$895.77 |
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7.8% |
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| 2 |
8.0% |
12 |
$1,122.38 |
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6.5% |
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| 3 |
0.0% |
3 |
$751.31 |
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10.0% |
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| Mortgages |
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| 1.
Determine the monthly payment on the following mortgages |
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Initial Months to Maturity |
Loan Amount |
Annual Interest Rate |
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ANSWER |
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| 1 |
360 |
$ 200,000 |
7.0% |
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$1,330.60 |
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| 2 |
300 |
$ 500,000 |
8.0% |
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$3,859.08 |
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| 3 |
180 |
$ 125,000 |
8.5% |
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$1,230.92 |
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| 2. For the
3 mortgages above, what is the value of the mortgages after 5 years have
elapsed |
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| given 1) the annual rates stay the same
and 2) the rates increase 1 percentage point |
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Rates Stay the Same |
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Rates Increase 1 percentage Point |
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| 1 |
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$188,263.18 |
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$172,399.20 |
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| 2 |
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$461,369.71 |
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$428,917.39 |
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| 3 |
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$99,279.56 |
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$95,127.33 |
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