A 20-year, $1,000 par value bond has a 6.4% annual payment coupon. The bond currently sells...

A 20-year, $1,000 par value bond has a 6.4% annual payment coupon. The bond currently sells for $1,080. If the yield to maturity remains at its current rate, what will the price be 4 years from now? A 7 percent corporate bond that pays interest semi-annually was issued last year. Which two of the following most likely apply to this bond today if the current yield-to-maturity is 6 percent?

I. a structure as an interest-only loan

II. a current yield that equals the coupon rate

III. A market price that is lower than its face value

IV. a market price that is higher than its face value

Group of answer choices:

II and IV only

I and IV only

I and III only

III and IV only

II and III only

Solutions

Expert Solution

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

A 20-year, $1,000 par value bond has 9.5% annual payment coupon. The bond currently sells for...

A 20-year, $1,000 par value bond has 9.5% annual payment coupon. The bond currently sells for $905. If the yield to maturity remains at its current rate, what will the price be 5 years from now? (Answer to the nearest cent, xxx.xx and enter without the dollar sign )

. A 20-year, $1,000 par value bond has a 7% annual payment coupon. The bond currently...

. A 20-year, $1,000 par value bond has a 7% annual payment coupon. The bond currently sells for $780. If the yield to maturity remains at the current rate, what will the price be 10 years from now?

Analyze the 20-year, 8% coupon rate (annual payment), $1,000 par value bond. The bond currently sells...

Analyze the 20-year, 8% coupon rate (annual payment), $1,000 par value bond. The bond currently sells for $1,318. What’s the bond’s current yield, and capital gain yield? 6.07%, 0.71% 6.07%, -0.71% 8%, 1.43% 8%, -1.43%

A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells...

A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $1,150. If the yield to maturity remains at its current rate, default risk is zero, and the bond is non-callable, what are the expected current and capital gains yields?A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $1,150. If the yield to maturity remains at its current rate, default risk is zero, and the bond...

A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells...

A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 10 years from now?

A 20-year, semiannual coupon bond sells for $1,043.47. The bond has a par value of $1,000...

A 20-year, semiannual coupon bond sells for $1,043.47. The bond has a par value of $1,000 and a yield to maturity of 6.72 percent. What is the bond's coupon rate?

AEP has a 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond...

AEP has a 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 8 years from now? Group of answer choices $901.78 $842.91 $892.55 $934.46 $953.25

Bond Returns: A 15-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond...

Bond Returns: A 15-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $925. After one year, assuming the the yield to maturity (discount rate) remains the same as previous, calculate the following returns between the two years: 1) Current yield 2) Capital gains yield 3) Total returns Hint: solve the rate (yield to maturity) for the 25-year bond. with the same yield to maturity, solve the price for the bond with shorter maturity....

1) A 25-year, $1,000 par value bond has an 8.5 percent annual payment coupon. The bond...

1) A 25-year, $1,000 par value bond has an 8.5 percent annual payment coupon. The bond currently sells at a discount (for $925 exactly). If the YTM doesn't change from its current level, what will the price be five years from now? a) $930.11 b) $884.19 c) $977.20 d) $953.36 2) GE's balance sheet as of today is as follows: Long-term debt (bonds, at par) $23,500,000 Preferred stock 2,000,000 Common stock ($10 par) 10,000,000 Retained earnings 4,000,000 Total debt and...

A 14-year, semiannual coupon bond sells for $974.17. The bond has a par value of $1,000...

A 14-year, semiannual coupon bond sells for $974.17. The bond has a par value of $1,000 and a yield to maturity of 6.54 percent. What is the bond's coupon rate?

Subjects