Question

In: Finance

What is the quoted price of a bond with 5 years to maturity, a coupon rate...

What is the quoted price of a bond with 5 years to maturity, a coupon rate of 8%, and a YTM of 7.5%? Coupons are paid semi-annually.

Solutions

Expert Solution

Quoted price of bond = coupon * (1 - (1+ ytm/2)^(-2n))/(ytm/2) + face value/(1 + ytm/2)^(2n)

coupon = 8% of 100/2 = 4

ytm = 7.5%

n = 5

face value = 100

quoted price of bond = 4 * (1 - 1.0375)^(-10)/.0375 + 100/(1.0375)^10

= 102.05

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

What is the quoted price of a bond with 5 years to maturity, a coupon rate...
What is the quoted price of a bond with 5 years to maturity, a coupon rate of 8%, and a YTM of 7.5%?
assume a bond has 5 years to maturity, a price of 1032, a coupon rate of...
assume a bond has 5 years to maturity, a price of 1032, a coupon rate of 6%, a par value of 1000, and 1 coupon payment per year. find the bonds yield to maturity. If the number of coupon payments per year was 4 instead of 1, what would be the bonds new yield to maturity
A 6% semiannual coupon bond has 8 years until maturity. Its quoted price is 107.50. if...
A 6% semiannual coupon bond has 8 years until maturity. Its quoted price is 107.50. if its YTM stays constant, what should be its quoted price 1 year from now?
The currently quoted price (3 years before maturity date) of a 5-year bond with a nominal...
The currently quoted price (3 years before maturity date) of a 5-year bond with a nominal of 1,000,000 PLN, interest 4% pa, coupons paid each 4M, is PLN 900,000. Calculate PVB and determine whether investor should buy this bond (or not) for the quoted price, if expected YTM during maturity period is 8% pa?
The currently quoted price (3 years before maturity date) of a 5-year bond with a nominal...
The currently quoted price (3 years before maturity date) of a 5-year bond with a nominal of 1,000,000 PLN, interest 4% pa, coupons paid each 4M, is PLN 900,000. Calculate PVB and determine whether investor should buy this bond (or not) for the quoted price, if expected YTM during maturity period is 8% pa?
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%?
Consider a bond that has a coupon rate of 5%, five years to maturity, and is...
Consider a bond that has a coupon rate of 5%, five years to maturity, and is currently priced to yield 6%. Calculate the following:  Macaulay duration  Modified duration  Percentage change in price for a 1% increase in the yield to maturity
Par Value Coupon Rate Years to Maturity Yield to Maturity Price Coupon Frequency $5,000.00 ? 5...
Par Value Coupon Rate Years to Maturity Yield to Maturity Price Coupon Frequency $5,000.00 ? 5 10% $4,620.92 annual $1,000.00 ? 15 5% $1,000.00 semiannual $1,000.00 ? 5 11% $923.34 monthly $1,000.00 ? 20 12% $924.50 quarterly Make sure to round all intermediate calculations to at least six decimal places.
Price each bond and explain how the number of years to maturity and the coupon rate...
Price each bond and explain how the number of years to maturity and the coupon rate affect the current price of bonds. Assume a YTM of 7%. A 4-year bond with a 9% annual coupon A 4-year bond with a zero coupon A 15-year bond with a 9% annual coupon A 15-year bond with a zero coupon The following content is partner prov
A bond price is $1,135.90. The maturity is 10 years. The coupon rate is 10%. Payments...
A bond price is $1,135.90. The maturity is 10 years. The coupon rate is 10%. Payments are semi-annual. Face value is $1,000. Solve for the YTM. Input your answer as whole percentage with two decimal places (x.xx), so 9.5% is input as 9.50.   Hint: first solve for the RATE by adjusting for semiannual again, then multiply this result by 2 to bring it back to annual. The PMT and FV have the same sign since they are inflows to the...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT