Question
In: Finance
A bond with 13 years to maturity and a coupon rate of 4% has a par,...
A bond with 13 years to maturity and a coupon rate of 4% has a par, or face, value of $18,000. Interest is paid annually. If you require a return of 10% on this bond, what is the value of this bond to you? (in absolute value)
Solutions
Expert Solution
Answer)
| Par Value | $18000 |
| Coupon Rate | 4% |
| Years | 13 |
| Required Rate | 10% |
Annual Coupon = 4% of 18000
Annual Coupon = $720
Price of the Bond = Interest x PVIFA(10%,13) + FV x PVIF(10%,13)
Price of the Bond = 720 x 7.10 + 18000 x 0.2897
Price of the Bond = 5112 + 5215
Price of the Bond = $10327
jeff jeffy answered 2 years agoRelated Solutions
A bond with a $1,000 par, 4 years to maturity, a coupon rate of 3%, and...
A bond with a $1,000 par, 4 years to maturity, a coupon rate of 3%,
and annual payments has a yield to maturity of 3.3%. What will be
the percentage change in the bond price if the yield changes
instantaneously to 4.7%?
A bond with a $1,000 par, 4 years to maturity, a coupon rate of 5%, and...
A bond with a $1,000 par, 4 years to maturity, a coupon rate of
5%, and annual payments has a yield to maturity of 4.3%. What will
be the percentage change in the bond price if the yield changes
instantaneously to 4.9%?
A bond with a $1,000 par, 4 years to maturity, a coupon rate of 3%, and...
A bond with a $1,000 par, 4 years to maturity, a coupon rate of 3%,
and annual payments has a yield to maturity of 3.3%. What will be
the percentage change in the bond price if the yield changes
instantaneously to 4.7%?
A bond with a $1,000 par, 6 years to maturity, a coupon rate of 4%, and...
A bond with a $1,000 par, 6 years to maturity, a coupon rate of
4%, and annual payments has a yield to maturity of 3.6%. What will
be the actual percentage change in the bond price if the yield
changes instantaneously to 4.3%? Round to the nearest 0.001%, drop
the % symbol (e.g., if your answer is, e.g., 1.1234%, enter it as
1.123.)
(Bonds) A bond with a $1,000 par, 4 years to maturity, a coupon rate of 5%,...
(Bonds) A bond with a $1,000 par, 4 years to maturity, a coupon
rate of 5%, and annual payments has a yield to maturity of 4.2%.
What will be the percentage change in the bond price if the yield
changes instantaneously to 4.6%? (If your answer is, e.g., -1.123%,
enter it as -1.123. If the sign of the price change is incorrect,
no credit will be given.)
A $1000 par value bond with 4 years to maturity has a coupon payment of 9%...
A $1000 par value bond with 4 years to maturity has a coupon
payment of 9% pa paid annually. Suppose the yield to maturity is
11% pa cont. comp.
Compute the bond price and the duration??
A bond with 1000 par value, has 14 years left to maturity has a coupon rate...
A bond with 1000 par value, has 14 years left to maturity has a
coupon rate of 10% with semi-annual coupon payments. The current
yield to maturity is 15.5%. What is the current yield?
13.64%
11.15%
11.95%
14.51%
12.78%
a bond with a $1000 par value, 10 years to maturity, and a coupon rate of...
a bond with a $1000 par value, 10 years to maturity, and a
coupon rate of 6% paid annually is selling for $1,123.42. Its yield
to maturity is:
a. 3.00%
b. 4.44%
c. 12.34%
d. 10.29%
A bond has a coupon rate of 10 percent and 4 years until maturity. If the...
A bond has a coupon rate of 10 percent and 4 years until
maturity. If the yield to maturity is 10.3 percent, what is the
price of the bond?
A bond has par=$1000, coupon rate of 3% and matures in 4 years. The bond pays...
A bond has par=$1000, coupon rate of 3% and matures in 4 years.
The bond pays semi-annual coupons. On the market, you see that the
current YTM is 9%, however, a trader told you that his expected
yield on the bond is only 3.6%. What default probability on the par
is the trader's expectation consistent with? (Provide your answer
as percent rounded to two decimals, omitting the % sign.)
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- What experience have you had with Organization Development or with Change Management? Describe the organization, the...
- 1. Renfro Rentals has issued bonds that have a 12% coupon rate, payable semiannually. The bonds...
- Given an array of positive integers a, your task is to calculate the sum of every...
- Define “culture.” Software is defined by the Merriam-Webster Dictionary as "the programs that run on a...
- In humans, hypotrichosis (sparse body hair) is a rare autosomal recessive condition. Let h = hypotrichosis...
- Increase all of the listing prices by 5% for all listings under $500,000 and 10% for...
- Samsung Industry that requires you to act as a change agent to form an organizational change...
ADVERTISEMENT