Question
In: Finance
7. What is the current price of 10-year bond, with 10% yield to maturity, 8% annual...
7. What is the current price of 10-year bond, with 10% yield to maturity, 8% annual coupon rate and $1,000 par value?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
A 12 year bond 1000 face value bond has an 8% annual coupon and a yield to maturity of 7%
A 12 year bond 1000 face value bond has an 8% annual coupon
and a yield to maturity of 7%, what will be the price of the bond 3
years from today?
. An investor buys a 10 year, 8% annual coupon bond at par (so the yield-to-maturity...
.
An investor buys a 10 year, 8% annual coupon bond at par (so
the yield-to-maturity must be 8%), and sells it after three years
(just after the coupon is recieved). Interest rates rise
immediately after the purchase, and the bond’s yield-to-maturity
jumps to 10% and remains there for the rest of the three year
period. Assume coupons are reinvested at the new
yield-to-maturity.
Show the components of the investor’s “total return,” or
portfolio value at the end of the...
A 14.55-year maturity zero-coupon bond selling at a yield to maturity of 7% (effective annual yield)...
A 14.55-year maturity zero-coupon bond selling at a yield to
maturity of 7% (effective annual yield) has convexity of 197.7 and
modified duration of 13.60 years. A 40-year maturity 5% coupon bond
making annual coupon payments also selling at a yield to maturity
of 7% has nearly identical modified duration—-13.96 years—but
considerably higher convexity of 338.8.
a. Suppose the yield to maturity on both bonds
increases to 8%.
What will be the actual percentage capital loss on each
bond?
What...
A 12.25-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield)...
A 12.25-year maturity zero-coupon bond selling at a yield to
maturity of 8% (effective annual yield) has convexity of 139.2 and
modified duration of 11.34 years. A 40-year maturity 6% coupon bond
making annual coupon payments also selling at a yield to maturity
of 8% has nearly identical modified duration—-12.30 years—but
considerably higher convexity of 272.9.
a. Suppose the yield to maturity on both bonds increases to 9%.
What will be the actual percentage capital loss on each bond? What...
A 12.75-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield)...
A 12.75-year maturity zero-coupon bond selling at a yield to
maturity of 8% (effective annual yield) has convexity of 150.3 and
modified duration of 11.81 years. A 30-year maturity 6% coupon bond
making annual coupon payments also selling at a yield to maturity
of 8% has nearly identical duration—11.79 years—but considerably
higher convexity of 231.2.
Suppose the yield to maturity on both bonds increases to 9%.
What will be the actual percentage capital loss on each bond? What
percentage capital...
A 13.05-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield)...
A 13.05-year maturity zero-coupon bond selling at a yield to
maturity of 8% (effective annual yield) has convexity of 120.2 and
modified duration of 11.91 years. A 40-year maturity 6% coupon bond
making annual coupon payments also selling at a yield to maturity
of 8% has nearly identical modified duration—-11.65 years—-but
considerably higher convexity of 280.2.
a.
Suppose the yield to maturity on both bonds increases to 9%.
What will be the actual percentage capital loss on each bond? What...
A 13.05-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield)...
A 13.05-year maturity zero-coupon bond selling at a yield to
maturity of 8% (effective annual yield) has convexity of 157.2 and
modified duration of 12.08 years. A 40-year maturity 6% coupon bond
making annual coupon payments also selling at a yield to maturity
of 8% has nearly identical modified duration—-12.30 years—-but
considerably higher convexity of 272.9.
a. Suppose the yield to maturity on both bonds
increases to 9%. What will be the actual percentage capital loss on
each bond? What...
A 10 year 1000 bond with 7% semi-annual coupons is bought for a price to yield...
A 10 year 1000 bond with 7% semi-annual coupons is bought for a
price to yield 6.5% conv. semiannually. It is bought on Feb 1,
2003. Find the actual selling price on Dec. 31, 2003. Find the
price quoted in paper (full) on Dec 31, 2003. Use 30/360.
A 10-year bond has a 10 percent annual coupon and a yield to maturity of...
A 10-year bond has a 10 percent annual coupon and a yield to
maturity of 12 percent. The bond can be called in 5 years at a call
price of $1,050 and the bond’s face value is $1,000. Which of the
following statements is most correct? Please explain why.
a. The bond’s current yield is greater than 10
percent.
b. The bond’s yield to call is less than 12
percent.
c. The bond is selling at...
What is the yield to maturity on the following: 10 year bond, 7.5% annual coupon, par...
What is the yield to maturity on the following:
10 year bond, 7.5% annual coupon, par value of $1,000, selling
for $813.12
a. 9.88%
b. 10.25%
c. 10.51%
d. 10.62%
e. 11.07%
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