Question
In: Finance
Axiom Consolidated Bonds have a 5.5% coupon rate and a $1,000 par value. They mature in...
- Axiom Consolidated Bonds have a 5.5% coupon rate and a $1,000 par value. They mature in 12 years and pay interest annually. Their YTM is currently 6%. A. Calculate the duration of the Bonds (you may want to use Excel here). B. Would these Bonds be appropriate to include in your portfolio if you expect interest rates to rise? Explain.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
EXPECTED INTEREST RATE Lourdes Corporation's 13% coupon rate, semiannual payment, $1,000 par value bonds, which mature...
EXPECTED INTEREST RATE
Lourdes Corporation's 13% coupon rate, semiannual payment,
$1,000 par value bonds, which mature in 20 years, are callable 4
years from today at $1,050. They sell at a price of $1,258.68, and
the yield curve is flat. Assume that interest rates are expected to
remain at their current level.
What is the best estimate of these bonds' remaining life? Round
your answer to two decimal places.
years
If Lourdes plans to raise additional capital and wants to...
Lourdes Corporation's 13% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 15 years,...
Lourdes Corporation's 13% coupon rate, semiannual payment,
$1,000 par value bonds, which mature in 15 years, are callable 5
years from today at $1,025. They sell at a price of $1,284.95, and
the yield curve is flat. Assume that interest rates are expected to
remain at their current level.
What is the best estimate of these bonds' remaining life?
It is now January 1, 2019, and you are considering the purchase
of an outstanding bond that was issued on January...
Lourdes Corporation's 13% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 15 years,...
Lourdes Corporation's 13% coupon rate, semiannual payment,
$1,000 par value bonds, which mature in 15 years, are callable 3
years from today at $1,050. They sell at a price of $1,218.85, and
the yield curve is flat. Assume that interest rates are expected to
remain at their current level. What is the best estimate of these
bonds' remaining life? Round your answer to two decimal places.
7.57 years If Lourdes plans to raise additional capital and wants
to use debt...
Lloyd Corporation’s 14% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 30 years,...
Lloyd Corporation’s 14% coupon rate, semiannual payment, $1,000
par value bonds, which mature in 30 years, are callable 5 years
from today at $1,050. They sell at a price of $1,353.54, and the
yield curve is flat. Assume that interest rates are expected to
remain at their current level. b. If Lloyd plan to raise additional
capital and wants to use debt financing, what coupon rate would it
have to set in order to issue new bonds at par?
Lourdes Corporation's 11% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 25 years,...
Lourdes Corporation's 11% coupon rate, semiannual payment,
$1,000 par value bonds, which mature in 25 years, are callable 3
years from today at $1,050. They sell at a price of $1,162.46, and
the yield curve is flat. Assume that interest rates are expected to
remain at their current level. What is the best estimate of these
bonds' remaining life? Round your answer to two decimal places.
years If Lourdes plans to raise additional capital and wants to use
debt financing,...
Lourdes Corporation's 15% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 10 years,...
Lourdes Corporation's 15% coupon rate, semiannual payment,
$1,000 par value bonds, which mature in 10 years, are callable 4
years from today at $1,075. They sell at a price of $1,359.25, and
the yield curve is flat. Assume that interest rates are expected to
remain at their current level.
What is the best estimate of these bonds' remaining life? Round
your answer to the nearest whole number.
years
If Lourdes plans to raise additional capital and wants to use
debt...
Lourdes Corporation's 15% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 30 years,...
Lourdes Corporation's 15% coupon rate, semiannual payment,
$1,000 par value bonds, which mature in 30 years, are callable 3
years from today at $1,025. They sell at a price of $1,245.45, and
the yield curve is flat. Assume that interest rates are expected to
remain at their current level.
What is the best estimate of these bonds' remaining life? Round
your answer to the nearest whole number.
years
If Lourdes plans to raise additional capital and wants to use
debt...
A bond with a $1,000 par value has a 4% annual coupon rate. Itwill mature...
A bond with a $1,000 par value has a 4% annual coupon rate. It
will mature in 4 years, and annual coupon payments are made at the
end of each year. Present annual yields on similar bonds are 3.5%.
What is the current price?
A $1,000 par value bond with an annual 8% coupon rate will mature in 10 years....
A $1,000 par value bond with an annual 8% coupon rate will
mature in 10 years. Coupon payments are made semi-annually. What is
the market price of the bond if the required market rate is 6%?
(See Appendix G.)
A company issued $1,000 par value bond at 6% coupon rate. The bond will mature in...
A company issued $1,000 par value bond at 6% coupon rate. The
bond will mature in 6 years. Current market yield for this bond is
7%. If the coupon is paid semi-annually, what would be the value of
this bond?
Group of answer choices
$951.68
$682.29
$973.36
$952.33
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