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In: Finance
Exactly two years ago an investor purchased a Portuguese government bond with a face value of...
Exactly two years ago an investor purchased a Portuguese government bond with a face value of EUR 10,000, an annually paid coupon of 5%, a remaining maturity of 10 years, and a YTM of 12%. Today, i.e., two years later, the bond has a YTM of 4%. What is the capital gain in EUR for this investor who bought the bond two years ago and sold it today (rounded to the nearest EUR)?
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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
As nothing was mentioned excel is used.
jeff jeffy answered 7 months agoRelated Solutions
Exactly two years ago an investor purchased a Portuguese government bond with a face value of...
Exactly two years ago an investor purchased a Portuguese
government bond with a face value of EUR 10,000, an annually paid
coupon of 5%, a remaining maturity of 10 years, and a YTM of 12%.
Today, i.e., two years later, the bond has a YTM of 4%. What is the
capital gain in EUR for this investor who bought the bond two years
ago and sold it today (rounded to the nearest EUR)?
A government bond with a face value of $1,000 was issued eight years ago and there...
A government bond with a face value of $1,000 was issued eight
years ago and there are seven years remaining until maturity. The
bond pays annual coupon payments of $90, the coupon rate is 9% pa
and rates in the marketplace are 9.5% p.a. What is the value of the
bond today?
a. $975.25
b. $1,427.50
c. $1,000.00
d. $972.83
e. $962.14
A. Two years ago, you purchased a new10-year bond issued by APPLE with a face value...
A. Two years ago, you purchased a new10-year bond issued by
APPLE with a face value of $1,000 and coupon interest rate of 3%.
Given the current crisis, bonds of equal risk and maturity are now
2%, so you decide to sell the bond. Calculate the selling price (4
points).
Calculate the Annualized HPR from your investment (2).
An investor purchased a bond at its face value of $2500. The bond stipulates a fixed...
An investor purchased a bond at its face value of $2500. The
bond stipulates a fixed nominal interest rate of 8% per year, paid
quarterly, over its 5 year life. The investor is thinking about
selling the bond after four years for $2200.
A) Draw out the cash flow diagram illustrating this situation
(either manually or using Excel).
B) Determine the quarterly IRR, the nominal rate of return, and
the effective rate of return if the bond is sold after...
An investor purchased a bond at its face value of $2500. The bond stipulates a fixed...
An investor purchased a bond at its face value of $2500. The
bond stipulates a fixed nominal interest rate of 8% per year, paid
quarterly, over its 5 year life. The investor is thinking about
selling the bond after four years for $2200.
a.Draw out the cash
flow diagram illustrating this situation (either manually or using
Excel).
b.Determine the
quarterly IRR, the nominal rate of return, and the effective rate
of return if the bond is sold after four years....
Question 3: A bond with a face value of $1000 and maturity of exactly 5 years...
Question 3: A bond with a face value of $1000 and maturity of
exactly 5 years pays 10% annual coupon. This bond is currently
selling at an annual yield-to-maturity (YTM) of 11.5%. Answer the
following questions for this bond. Calculate the current price of
the bond. (5 points) Calculate modified duration of the bond using
the timeline method. (10 points) Using just the modified duration,
what is the new price of the bond when YTM is 12%? (5 points)
solve...
A bond with a face value of $1000 and maturity of exactly 20 years pays 10%...
A bond with a face value of $1000 and maturity of exactly 20
years pays 10% annual coupon. This bond is currently selling at an
annual yield-to-maturity (YTM) of 12%. Answer the following
questions for this bond.
a. Calculate the current price of the bond by discounting all
the cash flows of the bond using the timeline method. b. Calculate
the modified duration of the bond without using any Excel built-in
function. (calculate PV of each cash flow, find the...
A corporate bond with a face value of $100,000 was issued six years ago and there...
A corporate bond with a face value of $100,000 was issued six
years ago and there are four years remaining until maturity. The
bond pays semi-annual coupon payments of $4500, the coupon rate is
9% pa paid twice yearly and rates in the marketplace are 9.4% pa
compounded semi-annually. What is the value of the bond today? a.
$98,975.05 b. $98,196.97 c. $100,000.00 d. $98,691.54 e.
$84,263.76
A corporate bond was issued a few years ago at face value of $1,000 with a...
A corporate bond was issued a few years ago at face value of
$1,000 with a YTM of 7% and quarterly paid coupons. Now with 12
years left until the maturity, the company has run into hard times
and the yield to maturity has increased to 15%.
1) What is the bond price now?
2) Suppose the company defer the loss to future and will make
good on the promised coupon payments. However, the deferred loss
will finally drive the...
One year ago, you purchased a $1,000 face value bond at a yield to maturity of...
One year ago, you purchased a $1,000 face value bond at a yield
to maturity of 9.45 percent. The bond has a 9 percent coupon and
pays interest semiannually. When you purchased the bond, it had 12
years left until maturity. You are selling the bond today when the
yield to maturity is 8.20 percent. What is your realized yield on
this bond?
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