Question
In: Finance
Assuming the standard US Par (Face) value of $1000, Annual coupon = $100 x 6% =...
Assuming the standard US Par (Face) value of $1000,
Annual coupon = $100 x 6% = $60
3) Consider a 6 percent coupon bond with a market yield of 7%.
a) What is the price of this bond if it matures tomorrow?
b) What is the price of this bond if it matures in 5 years?
c) What is the price of this bond if it matures in 10 years?
d) What is the price of this bond if it matures in 15 years?
e) What is the price of this bond if it matures in 20 years?
f) What is the price of this bond if it matures in 25 years?
g) What is the price of this bond if it matures in 30 years?
h) Plot price on the vertical axis and term to maturity on the horizontal axis.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Assuming the standard US Par (Face) value of $1000, Annual coupon = $100 x 6% =...
Assuming the standard US Par (Face) value of $1000,
Annual coupon = $100 x 6% = $60
a) Consider a 20-year 6 percent coupon bond.
i) What is the price of this bond if the market yield is 8%?
ii) What is the percentage change in the price of this bond if
the market yield rises to 9%?
b) Consider a 20-year 7 percent coupon bond.
iii) What is the price of this bond if the market yield is
8%?...
A bond face value is $1000, with a 6-year maturity. Its annual coupon rate is 7%...
A bond face value is $1000, with a 6-year maturity. Its annual
coupon rate is 7% and issuer makes semi-annual coupon payments. The
annual yield of maturity for the bond is 6%. The bond was issued on
7/1/2017. An investor bought it on 8/1/2019. Calculate its dirty
price, accrued interests, and clean price.
Today, you pay $1043.76 to buy a $1000 face value 6% coupon bond (semi-annual coupon payments)...
Today, you pay $1043.76 to buy a $1000 face value 6% coupon bond
(semi-annual coupon payments) bond that matures in 5 years.
a.) what is the yield to maturity of this bond?
b.) If you reinvest the coupon payments at 2% per year (1% per
6 monhs), what is the value of the reinvested coupons after 5
years?
c.) what is yout nominal realized compound yield if hold the
bond to maturity but reinvest the coupons at a rate of...
You just purchased a 30-year bond with 6% annual coupon, par value of $1000, and 15...
You just purchased a 30-year bond with 6% annual coupon, par
value of $1000, and 15 years to maturity. The bond makes payments
semi-annually and the interest rate in the market is 7.0%.
Calculate bond price as of today
• $936.74 • $1015.76 • $918.04 • $908.04
You just purchased a 30-year bond with 6% annual coupon, par
value of $1000, and 15 years to maturity. The bond makes payments
semi-annually and the interest rate in the market is 7.0%....
A 6% annual coupon bond has 11 years remaining until maturity. Par value is $1000. The...
A 6% annual coupon bond has 11 years remaining until maturity. Par
value is $1000.
The required rate of return (yield to maturity)on the bond is
8.5%.
Compute the price of the bond today using the appropriate Excel
formula
Compute the price of the same bond if it has 10 years remaining to
maturity instead of 11.
What is the capital gains yield on the bond?
What is the current yield on the bond?
What is the total yield on...
A bond has a face value of $1000 and the coupon rate is 6%. Coupons are...
A bond has a face value of $1000 and the coupon rate is 6%.
Coupons are paid semiannually. The bond matures in six years. The
market interest rate is 7%. What is the present value of this bond?
And Suppose the price of the bond equals to the present value of
the bond. What is the current yield of this bond?
Sam wants to purchase a bond that has a par (face) value of $1000, an annual...
Sam wants to purchase a bond that has a par (face) value of
$1000, an annual coupon rate of 7%, and a maturity of 10 years.
Sam's annual required rate of return is 11%. What should Sam be
willing to pay for this bond?
760.99
1000
2100.00
764.43
what is the price of a $1000 par value bond with a coupon rate of 6.9%(annual...
what is the price of a $1000 par value bond with a coupon rate of
6.9%(annual payments) that matures in 25 years, assuming that the
bond's YTM is 4.57% p.a.?
You own a bond that pays $100 in annual interest, with a $1000 par value. It...
You own a bond that pays $100 in annual interest, with a
$1000 par value. It matures in 15 years. The market's required
yield to maturity on a comparable-risk bond is 12 percent.
a. Calculate the value of the bond. b. How does the value change
if the yield to maturity on a comparable-risk bond (i) increases
to 15 percent or (ii) decreases to 8 percent? c. Explain the
implications of your answers in part b as they relate to...
You own a bond that pays $100 in annual interest, with a $1000 par value. It...
You own a bond that pays $100 in annual interest, with a $1000
par value. It matures in 20 years. The market's required yield to
maturity on a comparable-risk bond is 11 percent.
A. Calculate the value of the bond.
B. How does the value change if the yield to maturity on a
comparable-risk bond (i)increase to 14% or (ii) decreases to
6%?
C. Explain the implications of your answers in part b as they
relate to interest rate risk,...
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