1

1.
Issuer name: Verizon Communications
Symbol: VZ/17B
Coupon: 1.3500%
Maturity date: 06/09/17
Last Trade Price: 100.0500
Last Trade time: 09/15/2015 at 14:55:13
Change $: -2.2000
Volume issue type: Corporate
Listed/Traded: Trade on NYSE

Bid: today s market costs proposed regarding the bond or various other securities
Bid Size: the total number of shares that are offered to buy at chosen bid value.
Ask: the actual value issuers or in other words companys seeking value regarding the stocks.
Ask size: the quantity of securities the corporation is proposing to actually offer for sale using the asking
price.
High/low: the highest plus the lowest prices the fact that a stock is known for having bought and sold during
the course of the prior year.
Volume: signifies the amount of shares that have already shifted hands in the course of the trading date.
Open: the price value of which the first share appeared to be invested inside of the transaction day.
Ask yield: it is actually the profit investors would receive in the event that they paid the asking price as well
as held about bond to maturity
maturity.

2.
3. The very last trade price could be 100-2.500= $97.5*10 =$975
4.
Yearly coupon interest = 1.35/100*1000=$13.5
5.
6. Yield to maturity = annual coupon/current bond price 13.5/975=1.38%
7.

8.
9. 2.65% rounded off to the nearest 3%
10.
11. Perhaps one of the drawbacks of yield to maturing is probably the presumption relating to
reinvestment considering the coupon payments in an interest rate equates to in to YTM, which is
certainly normally not the truth. The present yield actually takes into consideration coupon interest
and it does not count when it comes to the capital gains or those losses and timings of finances
flow which will influence on investors return. Quite simple it does not take into consideration capital
gain realized when purchasing a bond with the use of discount is in fact held till maturation.
12.
a)
13. Return on bonds that are newly issued decreases when the bonds are call back prior to maturity.
Bonds are called back when the interest rates decrease in the market. As the firm had already
issued the bond with higher coupon rate, the company perhaps would want to reissue bonds with
lower interest rate. Due to this reason firms calls back the already issued callable bonds and
reissue the bonds at a low rate of interest.

b)

.
c)

Return relating to bonds that are generally brand new released gets smaller the moment the
bonds seems to be call back just before maturity. Bonds these are known as back whenever the
interest rates lower in the market. Clearly as the agency had already supplied the bond along
with much higher coupon rate, the firm quite possibly would probably prefer to reissue bonds
with the use of lower interest rate. Resulting from this special reason organization calls back
about already released callable bonds as well as reissue really the bonds at a very low rate of
interest

d)

e)

c)

f)

Rating Aa3 happens to be the 4th mostly remarkable score in Moody's extended corporate bond
analysis. Bonds graded as a Aa3 really are ascertain to actually be of high quality as well as low
credit hazard. Basically as the greater amount the danger the more will be the arrival. Bonds
analyzed a lot higher just as Aa3 gives out lower return because they are considerably less
hazardous securities. Securities having the much more unpleasant rating hosts higher yields as
a consequence of higher credit risk. Definitely the bond score with regards to IBM bonds is A
proposing solid capability to meet up money correlated responsibilities yet still is susceptible to
opposed highly effective improvements. They tend to have much lower risk of default and are
also given the name lower yield.

g)