Question
In: Finance
Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face...
Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1,000 and a coupon rate of 7.9 % (annual payments). The yield to maturity on this bond when it was issued was 6.2%. What was the price of this bond when it was issued?
When it was issued, the price of the bond was......? (round to the nearest cent.)
Solutions
Expert Solution
M = $1000, n = 10, i = 6.2%, C
= 7.9% * $1000 = $79
P = $575.98 + $547.97
P = $1,123.94
jeff jeffy answered 2 years agoRelated Solutions
Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face...
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Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face...
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A. Suppose that General Motors Acceptance Corporation issued a
bond with 10 years until maturity, a face value of $1000, and a
coupon rate of 7.8% (annual payments). The yield to maturity on
this bond when it was issued was 6.2%. Assuming the yield to
maturity remains constant, what is the price of the bond
immediately after it makes its first coupon payment? After the
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Suppose that Ally Financial Inc. issued a bond with 10 years until maturity, a face value...
Suppose that Ally Financial Inc. issued a bond with 10 years
until maturity, a face value of $1000, and a coupon rate of 7%
(annual payments). The yield to maturity on this bond when it was
issued was 6%.
a. What was the price of this bond when it was issued?
b. Assuming the yield to maturity remains constant, what is the
price of the bond immediately before it makes its first coupon
payment?
c. Assuming the yield to maturity...
Suppose that Ally Financial Inc. issued a bond with 10 years until maturity, a face value...
Suppose that Ally Financial Inc. issued a bond with 10 years
until maturity, a face value of $1000, and a coupon rate of 7%
(annual payments). The yield to maturity on this bond when it was
issued was 6%.
a. What was the price of this bond when it was issued?
b. Assuming the yield to maturity remains constant, what is the
price of the bond immediately before it makes its first coupon
payment?
c. Assuming the yield to maturity...
Suppose that Ally Financial Inc. issued a bond with 10 years until maturity, a face value...
Suppose that Ally Financial Inc. issued a bond with 10 years
until maturity, a face value of $1,000 and a coupon rate of 7%
(annual payments). The yield to maturity on this bond when it was
issued was 6 %.
a. What was the price of this bond when it was
issued? (round to the nearest cent).
b. Assuming the yield to maturity remains
constant, what is the price of the bond immediately before it makes
its first coupon...
Suppose that Ally Financial Inc. issued a bond with 10 years until maturity, a face value...
Suppose that Ally Financial Inc. issued a bond with 10 years
until maturity, a face value of $1,000, and a coupon rate of 7%
(annual payments). The yield to maturity on this bond when it was
issued was 6%.
a. What was the price of this bond when it was issued? (round to
the nearest cent)
b. Assuming the yield to maturity remains constant , what is the
price of the bond immediately before it makes it first coupon
payment?...
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