A bond offers a coupon rate of 5%, paid semiannually, and has a maturity of 20...

A bond offers a coupon rate of 5%, paid semiannually, and has a maturity of 20 years. If the current market yield is 8%, what should be the price of this bond?

Expert Solution

We need to present value of all cash inflow

Since bond interest payment is semi annual interest =5%/2*1000 =$25

Market yield rate is used for calculating PV factor 8%/2 =4%

No of period =20*2 =40 periods

	Cash Flow	PV Factor 4% period 40	Present Value
Interest 1000*5%/2	25	19.7928	$ 494.82
Maturity value	1000	0.2083	$ 208.29
Value of Bond	$ 703.11

ekkarill92 answered 2 years ago

A bond offers a coupon rate of 6%, paid semiannually, and has a maturity of 17...

A bond offers a coupon rate of 6%, paid semiannually, and has a maturity of 17 years. If the current market yield is 3%, what should be the price of this bond?

5. A bond offers a coupon rate of 7%, paid annually, and has a maturity of...

5. A bond offers a coupon rate of 7%, paid annually, and has a maturity of 18 years. If the current market yield is 9% (discount rate), what should be the price of this bond? 6. A bond offers a coupon rate of 10%, paid semiannually, and has a maturity of 6 years. If the current market yield is 6%, what should be the price of this bond?

A bond offers a coupon rate of 4%, paid annually, and has a maturity of 5...

A bond offers a coupon rate of 4%, paid annually, and has a maturity of 5 years. The current market yield is 9%. If market conditions remain unchanged, what should be the Capital Gains Yield of the bond?

A bond offers an annual coupon rate of 5%, with interest paid semiannually. The bond matures...

A bond offers an annual coupon rate of 5%, with interest paid semiannually. The bond matures in seven years. The price of this bond per 100 of par value is 112.54, what is its yield-to-maturity?

A) A bond offers a coupon rate of 12%, paid annually, and has a maturity of...

A) A bond offers a coupon rate of 12%, paid annually, and has a maturity of 16 years. The current market yield is 14%. Face value is $1,000. If market conditions remain unchanged, what should be the Capital Gains Yield of the bond? B) You own a bond with the following features: face value of $1000, coupon rate of 5% (semiannual compounding), and 15 years to maturity. The bond has a current price of $1,115. The bond is callable after...

A) A bond offers a coupon rate of 9%, paid annually, and has a maturity of...

A) A bond offers a coupon rate of 9%, paid annually, and has a maturity of 14 years. The current market yield is 10%. Face value is $1,000. If market conditions remain unchanged, what should the price of the bond be in 1 year? Assume the market yield remains unchanged. B) A bond currently trades at a price of $852.72 in the market. The bond offers a coupon rate of 7%, paid annually, and has a maturity of 15 years....

A bond offers a coupon rate of 3%, paid annually, and has a maturity of 19...

A bond offers a coupon rate of 3%, paid annually, and has a maturity of 19 years. Face value is $1,000. If the current market yield is 11% (discount rate), what should be the price of this bond? Enter your answer in dollars, without the dollar sign ('$'), and rounded to the nearest cent (2 decimals).

A bond offers a coupon rate of 6%, paid annually, and has a maturity of 9...

A bond offers a coupon rate of 6%, paid annually, and has a maturity of 9 years. The current market yield is 14%. If market conditions remain unchanged, what should be the Capital Gains Yield of the bond?

A bond offers a coupon rate of 6%, paid annually, and has a maturity of 6...

A bond offers a coupon rate of 6%, paid annually, and has a maturity of 6 years. If the current market yield is 7% (discount rate), what should be the price of this bond? Enter your answer in dollars, without the dollar sign ('$'), and rounded to the nearest cent (2 decimals).

4. A bond offers a coupon rate of 6%, paid annually, and has a maturity of...

4. A bond offers a coupon rate of 6%, paid annually, and has a maturity of 11 years. The current market yield is 3%. If market conditions remain unchanged, what should the price of the bond be in 1 year?

Question