The YTM of a 1,000 with a 10% coupon rate, semiannual coupons, and two years to...

The YTM of a 1,000 with a 10% coupon rate, semiannual coupons, and two years to maturity is 6.5% APR, compounded semiannually.

a. What must its price be ?

972.69

none of the above

1,063.72

1,046.66

948.61

Expert Solution

FV = 1000
PMT = 1000 * 10% / 2 = 50
Nper = 2 * 2 = 4
Rate = 6.5% / 2 = 3.25%

Price of the bond can be calculated by using the following excel formula:
=PV(rate,nper,pmt,fv)
=PV(3.25%,4,-50,-1000)
= 1,064.66

Price of the bond = 1,064.66

jeff jeffy answered 2 years ago

The YTM of 1,000 bond with a 10% coupon rate, semiannual coupons, and two years to...

The YTM of 1,000 bond with a 10% coupon rate, semiannual coupons, and two years to maturity is 6.5 APR, compounded semiannually. b.Suppose the market price of this bond curretly is $980. Is there an arbitrage opportunity ? Answer : Yes / No c. Is this bond undervalued or overvalued by the market ? Answer : I don't know / Undervalued / Overvalued d. Should you long or short this bond ? Answer : Long / Short / Do nothing...

Suppose a 10-year, $ 1,000 bond with a 10 % coupon rate and semiannual coupons is...

Suppose a 10-year, $ 1,000 bond with a 10 % coupon rate and semiannual coupons is trading for a price of $906.44 .a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? b. If the bond's yield to maturity changes to8 %APR, what will the bond's price be?

Suppose a 10-year, $1,000 bond with a 10% coupon rate and semiannual coupons is trading for...

Suppose a 10-year, $1,000 bond with a 10% coupon rate and semiannual coupons is trading for a price of $ 913.23. a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? b. If the bond's yield to maturity changes to 9% APR, what will the bond's price be?

The yield to maturity of a $1,000 bond with a 7.4% coupon rate, semiannual coupons, and...

The yield to maturity of a $1,000 bond with a 7.4% coupon rate, semiannual coupons, and two years to maturity is 8.9% APR, compounded semiannually. What is its price?

The yield to maturity of a $1,000 bond with a 7.1% coupon rate, semiannual coupons, and...

The yield to maturity of a $1,000 bond with a 7.1% coupon rate, semiannual coupons, and two years to maturity is 8.3% APR, compounded semiannually. What is its price?

The yield to maturity of a $1,000 bond with a 6.7% coupon rate, semiannual coupons, and...

The yield to maturity of a $1,000 bond with a 6.7% coupon rate, semiannual coupons, and two years to maturity is 8.2% APR, compounded semiannually. What is its price?

The yield to maturity of a $1,000 bond with a 7.4 % coupon rate, semiannual coupons,...

The yield to maturity of a $1,000 bond with a 7.4 % coupon rate, semiannual coupons, and two years to maturity is 8.8 %APR, compounded semiannually. What is its price?

Suppose a ten-year, $ 1,000 bond with an 8.1 % coupon rate and semiannual coupons is...

Suppose a ten-year, $ 1,000 bond with an 8.1 % coupon rate and semiannual coupons is trading for $ 1, 035.42. a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? (round to two decimal places) b. If the bond's yield to maturity changes to 9.6 % APR, what will be the bond's price? (round to the nearest cent)

Suppose a ten-year, $ 1,000 bond with an 8.7 % coupon rate and semiannual coupons is...

Suppose a ten-year, $ 1,000 bond with an 8.7 % coupon rate and semiannual coupons is trading for $ 1,035.04. a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? b. If the bond's yield to maturity changes to 9.1 % APR, what will be the bond's price?

Suppose a ten-year, $1,000 bond with an 8.3% coupon rate and semiannual coupons is trading for...

Suppose a ten-year, $1,000 bond with an 8.3% coupon rate and semiannual coupons is trading for $1,034.16. a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? b. If the bond's yield to maturity changes to 9.8% APR, what will be the bond's price?

Question