Finance – bonds | Business & Finance homework help

I am struggling in calculating bonds.  Below is the requirements:

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Assume interest rates for bonds today is 5% for an AAA rated bond. Calculate the price of the bond you have selected relative to the 5%. Is the bond selling at a premium or a discount? Why? Be sure to show how you arrived at your answer.  What other factors may influence the value of a bond? 


Here is what I have done so far:


Assume interest rates for bonds today is 5% for an AAA rated bond. Calculate the price of the bond you have selected relative to the 5%.


I selected the bond Goldman Sachs Group Inc., Non-callable, Semi-Annual coupon frequency payment




Price: 101.02 


Coupon: 5.125%


Yield to Maturity = -3.694% 


Current Yield: 5.073


 The semi-annual coupon rate is 2.5625 (5.125 / 2%).  The assumed interest rate of 5% is displayed as .25 (5% / 2%).  This is a 10 year bond so the number of periods is 20 since this is paid semi-annually (10 * 2).


 PVo = ( coupon) (1 – [1/ (1 + r)ᵐ] )     + ( par value )


                              R                                  (1 + r)ᵐ 


PVo = (2.56) (1 – [1/(1 + .025)20])  +  (1,000)


                              .025                  (1 + .025)20


PVo = (2.56) (1-[1/(1.025)20])  +  (1,000)

                      .025                           (1.025)20



Here is the information on the bond:





As of 3-Dec-2015













Coupon (%):


Maturity Date:


Yield to Maturity (%):


Current Yield (%):


Fitch Ratings:


Coupon Payment Frequency:


First Coupon Date:
















Quantity Available:


Minimum Trade Qty:


Dated Date:


Settlement Date:




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