It is now January 1, 2019, and you are considering the purchase of an outstanding bond that was issued on January 1, 2017. It has a 9% annual coupon and had a 20-year original maturity. (It matures on December 31, 2036.) There is 5 years of call protection (until December 31, 2021), after which time it can be called at 108—that is, at 108% of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at 114.12% of par, or $1,141.20.

1. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places.

     %

   What is the yield to call? Do not round intermediate calculations. Round your answer to two decimal places.

     %

2. If you bought this bond, which return would you actually earn?
   1. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM.
   2. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC.
   3. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC.
   4. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM.

   -Select-I II III IV Item 3

3. Suppose the bond had been selling at a discount rather than a premium. Would the yield to maturity have been the most likely return, or would the yield to call have been most likely?
   1. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC.
   2. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC.
   3. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM.
   4. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM.

A bond has a $1,000 par value, 20 years to maturity, and an 8% annual coupon and sells for $1,110.

1. What is its yield to maturity (YTM)? Round your answer to two decimal places.

       %

2. Assume that the yield to maturity remains constant for the next four years. What will the price be 4 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.

   $  

Harrimon Industries bonds have 6 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 10%.

1. What is the yield to maturity at a current market price of
   1. $864? Round your answer to two decimal places.

          %

   2. $1,196? Round your answer to two decimal places.

          %

2. Would you pay $864 for each bond if you thought that a "fair" market interest rate for such bonds was 12%—that is, if r_d = 12%?
   1. You would buy the bond as long as the yield to maturity at this price equals your required rate of return.
   2. You would not buy the bond as long as the yield to maturity at this price is greater than your required rate of return.
   3. You would not buy the bond as long as the yield to maturity at this price is less than the coupon rate on the bond.
   4. You would buy the bond as long as the yield to maturity at this price is greater than your required rate of return.
   5. You would buy the bond as long as the yield to maturity at this price is less than your required rate of return.

   -Select-I II III IV V

Madsen Motors's bonds have 16 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 12%, and the yield to maturity is 13%. What is the bond's current market price? Round your answer to the nearest cent.

$  

A Treasury bond that matures in 10 years has a yield of 4.00%. A 10-year corporate bond has a yield of 8.25%. Assume that the liquidity premium on the corporate bond is 0.70%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.

  %

1. Gabriele Enterprises has bonds on the market making annual payments, with 17 years to maturity, a par value of $1,000, and selling for $810. At this price, the bonds yield 10 percent. What must the coupon rate be on the bonds?

2. Chamberlain Co. wants to issue new 13-year bonds for some much-needed expansion projects. The company currently has 12.0 percent coupon bonds on the market that sell for $1,112.67, make semiannual payments, and mature in 13 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? Assume a par value of $1,000.

What is significant about the difference between Budgeted Cost of Work Performed and Actual Cost of Work Performed (i.e., BCWP - ACWP)? How is it different than Budget vs. Actuals? (4 pts)

1) Approximately how much was paid to invest in a project that has an npv break-even level of sales of 5 million, cash flows determined by: 0.12*sales - 375000, an 8 year life and a 10% discount rate?

I'm having trouble figuring out what the standard deviation is for the following problem. Common stock of Escapist Films sells for $30 a share and offers the following payoffs next year: Boom 0 $21 Normal $1 $32 Recession $3 $36 The expected return of Escapist is: Boom -30% Normal 10% Recession 30% Calculate the standard deviation of Escapist.

I posted this about a week ago and still have not received an answer. Can someone please help me with this? Thank you!

The school you would like to attend costs $100,000. To help finance your education, you need to choose whether or not to sell any of your 500 shares of Apple stock you bought five years ago, 100 Apple bonds (each with a $1,000 face value and a 3.25% coupon rate) that are five years from their 10-year maturity date, or a combination of both. Provide the appropriate data and calculations that you would perform to make this decision

Investor X has 7,000 to spend on the following three projects. Use the AW method to determine which of these independent investments are financially acceptable at 6% per year compounded monthly interest rate.

Lifelong period. Use CC=AW/i to get present worth

See Below Answer. How do you get this answer?

Rust Bucket Motor Credit Corporation (RBMCC), a subsidiary of Rust Bucket Motor, offered some securities for sale to the public on March 28, 2,008. Under the terms of the deal, RBMCC promised to repay the owner of one of these securities $82,927 on March 28, 2,031, but investors would receive nothing until then. Investors paid RBMCC $21,165 for each of these securities; so they gave up $21,165 on March 28, 2,008, for the promise of a $82,927 payment in 2,031.

Suppose that, on March 28, 2,017, this security’s price is $45,942. If an investor had purchased it for $21,165 at the offering and sold it on this day, what annual rate of return would she have earned?

1. A $1,000 face value corporate bond with a 6.5 percent coupon (paid semiannually) has 15 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 7.2 percent. The firm has recently gotten into some trouble and the rating agency is downgrading the bonds to BB. The new appropriate discount rate will be 8.5 percent. What will be the change in the bond's price in dollars and percentage terms? (LG 6-2)

17. A $1,000 face value corporate bond with a 6.75 percent coupon (paid semiannually) has 10 years left to maturity. It has had a credit rating of BB and a yield to maturity of 8.2 percent. The firm recently became more financially stable and the rating agency is upgrading the bonds to BBB. The new appropriate discount rate will be 7.1 percent. What will be the change in the bond's price in dollars and percentage terms? (LG 6-2)

refer to the table

economic state probability return on stock j return on stock k

bear 0.25 -0.02 0.034

normal 0.60 0.138 0.062

bull 0.15 0.218 0.092

1. calculate the expected return of each stock

2. if a portfolio was created with from 30% of stock j and 70% of stock k, what is the expected return of the portfolio?

3. calculate the standard deviation of each stock

4. calculate the covariance between the two stocks

5. calculate the correlation coefficient between the two stocks

6. what is the portfolio standard deviation?

please show all workings... thats the only questions given

Your company will receive USD10,000,000 in 3 months' time and will keep the funds for a 3-month period to cover a payable 6 months from today. Your analysts think that interest rates may fall from their current level at 6.1% and you want to protect the return you will get until you need the funds. BNP-Paribas, a French bank, offers a FRA with an interest rate of 6% to cover the extra funds for the 3-month period 3 months from today. Your company decides to take the FRA offer from BNP-Paribas.

What will happen to both parties if interest rates 3 months from now are at the following rates?

1. 6.1%
2. 5.2%
3. 6.0%

Show all calculations leading to your conclusions on any amounts that might need to be exchanged.