Question
In: Finance
Bond Dave has a 7 percent coupon rate, makes semiannual payments, a 7 percent YTM, and...
Bond Dave has a 7 percent coupon rate, makes semiannual payments, a 7 percent YTM, and 26 years to maturity. If interest rates suddenly rise by 5 percent, what is the percentage change in the price of Bond Dave? 4 decimals (e.g. 0.0123).
Solutions
Expert Solution
| Bond price is the present value of cash flow from bond. | ||||||||||||
| Existing Price of bond | = | =-pv(rate,nper,pmt,fv) | Where, | |||||||||
| = | $ 1,000.00 | rate | 7.00% | / | 2 | = | 0.035 | |||||
| nper | 26 | * | 2 | = | 52 | |||||||
| pmt | $ 1,000.00 | * | 7.00% | * | 6/12 | = | $ 35.00 | |||||
| fv | = | $ 1,000.00 | ||||||||||
| Revisedg Price of bond | = | =-pv(rate,nper,pmt,fv) | Where, | |||||||||
| = | $ 603.47 | rate | 12.00% | / | 2 | = | 0.06 | |||||
| nper | 26 | * | 2 | = | 52 | |||||||
| pmt | $ 1,000.00 | * | 7.00% | * | 6/12 | = | $ 35.00 | |||||
| fv | = | $ 1,000.00 | ||||||||||
| % change in the price of bond | = | (b-a)/a | Where, | |||||||||
| = | -0.3965 | a | $ 1,000.00 | |||||||||
| b | $ 603.47 | |||||||||||
jeff jeffy answered 3 months agoRelated Solutions
Bond Dave has a 8 percent coupon rate, makes semiannual payments, a 8 percent YTM, and...
Bond Dave has a 8 percent coupon rate, makes semiannual
payments, a 8 percent YTM, and 27 years to maturity. If interest
rates suddenly rise by 4 percent, what is the percentage change in
the price of Bond Dave? Enter the answer with 4 decimals (e.g.
0.0123).
Bond Dave has an 8% coupon rate, makes semiannual payments, a 9% YTM, and 25 years...
Bond Dave has an 8% coupon rate, makes semiannual payments, a 9%
YTM, and 25 years to maturity. If interest rates suddenly rise 4%,
what is the percentage change in the price of bond dave? answer
with 4 decimals.
The bond has a coupon rate of 5.57 percent, it makes semiannual payments, and there are...
The bond has a coupon rate of 5.57 percent, it makes semiannual
payments, and there are 5 months to the next coupon payment. A
clean price of $923 and the par value is $1,000. What is the
invoice price?
Multiple Choice
A. $927.64
B. $895.15
C. $918.36
D. $899.79
E. $950.85
A bond has a coupon rate of 8 percent, 7 years to maturity, semiannual interest payments,...
A bond has a coupon rate of 8 percent, 7 years to maturity,
semiannual interest payments, and a YTM of 7 percent. If interest
rates suddenly rise by 1.5 percent, what will be the percentage
change in the bond price?
A bond has a coupon rate of 8 percent, 7 years to maturity, semiannual interest payments,...
A bond has a coupon rate of 8 percent, 7 years to maturity,
semiannual interest payments, and a YTM of 7 percent. If interest
rates suddenly rise by 1.5 percent, what will be the percentage
change in the bond price? Use Excel
Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 7.5 percent, a YTM of 6 percent, and 13 years to maturity.
Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 7.5 percent, a YTM of 6 percent, and 13 years to maturity. Bond Y is a discount bond making semiannual payments. This bond has a coupon rate of 6 percent, a YTM of 7.5 percent, and also 13 years to maturity. Assume the interest rates remain unchanged and a $1,000 par value. a. What are the prices of these bonds today? (Do not round intermediate...
Zinger has a bond outstanding with a coupon rate of 5.6 percent and semiannual payments. The...
Zinger has a bond outstanding with a coupon rate of 5.6 percent
and semiannual payments. The bond has a yield to maturity of 5.5
percent, a par value of $2,000, and matures in 18 years. Calculate
the market value of the bond?
2,022.67
101.13
103.16
106.19
1,012.89
Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced...
Both Bond Sam and Bond Dave have 7 percent coupons, make
semiannual payments, and are priced at par value. Bond Sam has four
years to maturity, whereas Bond Dave has 15 years to maturity.
a.If interest rates suddenly rise by 2 percent, what is the
percentage change in the price of Bond Sam and Bond Dave?
b. If rates were to suddenly fall by 2 percent instead, what
would be the percentage change in the price of Bond Sam and...
Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced...
Both Bond Sam and Bond Dave have 7 percent coupons, make
semiannual payments, and are priced at par value. Bond Sam has 3
years to maturity, whereas Bond Dave has 18 years to maturity.
If interest rates suddenly rise by 2 percent, what is the
percentage change in the price of Bond Sam?
-5.16%
-5.44%
-5.14%
5.22%
If interest rates suddenly rise by 2 percent, what is the
percentage change in the price of Bond Dave?
...
Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced...
Both Bond Sam and Bond Dave have 7 percent coupons, make
semiannual payments, and are priced at par value. Bond Sam has 5
years to maturity, whereas Bond Dave has 12 years to maturity. (Do
not round your intermediate calculations.) Requirement 1: (a) If
interest rates suddenly rise by 4 percent, what is the percentage
change in the price of Bond Sam? (b) If interest rates suddenly
rise by 4 percent, what is the percentage change in the price of...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Singh Development Co. is deciding whether to proceed with Project X. The cost would be $12...
- CS2123 Data Structures - Fall 2019 Assignment 1: Function Runtimes Table Due 9/11/19 by 11:59pm Completing...
- Question 2. Design a 16-1 MUX using any number of lower MUXs, such as 8-1 or...
- . Write a function that takes, as arguments, two objects, value1 and value2. If
- Wii Brothers, a game manufacturer, has a new idea for an adventure game. It can market...
- Consider the distillation of ethanol (C2H5OH) and the combustion of ethanol . Use a bullet point...
- 1.How does Economic exposure to exchange rate movements affect the capital budgeting of a firm? Provide...
ADVERTISEMENT