There is a 3-year bond available with a face of PLN 500,000, interest 6% pa, coupons...

There is a 3-year bond available with a face of PLN 500,000, interest 6% pa, coupons paid semi-annually. It is expected that the YTM will be fixed during maturity period at 8% pa. Estimate how would the PVB at issue date change if YTM were to immediately increase to 12% pa and stay fixed during maturity period? Please use the best possible estimation (approximation).

Expert Solution

Excel sheet used to solve the question :

Formula sheet :

jeff jeffy answered 2 years ago

There is a 3-year bond available with a face of PLN 500,000, interest 6% pa, coupons...

There is a 3-year bond available with a face of PLN 500,000, interest 6% pa, coupons paid semi-annually. It is expected that the YTM will be fixed during maturity period at 8% pa. Estimate how would the PVB at issue date change if YTM were to immediately increase to 12% pa and stay fixed during maturity period? Please use the best possible estimation (approximation).

Calculate a dirty price of 3-year bond with a face of 1,000,000 PLN, coupons paid each...

Calculate a dirty price of 3-year bond with a face of 1,000,000 PLN, coupons paid each 4M with a rate of 9% pa., YTM 10% if there are 11 months till maturity date. Assume practical method of calculating dirty price.

Consider a five-year, default-free bond with annual coupons of 6% and a face value of $1,000...

Consider a five-year, default-free bond with annual coupons of 6% and a face value of $1,000 and assume zero-coupon yields on default-free securities are as summarized in the following table: Maturity 1 year 2 years 3 years 4 years 5 years Zero-Coupon Yields 5.00% 5.30% 5.50% 5.70% 5.80% a. What is the yield to maturity on this bond? The yield to maturity on this bond is ............% (Round to three decimal places.) b. If the yield to maturity on this...

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?

A bond issue with a face amount of $500,000 bears interest at the rate of 7%....

A bond issue with a face amount of $500,000 bears interest at the rate of 7%. The current market rate of interest is 8%. These bonds will sell at a price that is: Equal to $500,000. Less than $500,000. More than $500,000. The answer cannot be determined from the information provided.

A bond issue with a face amount of $500,000 bears interest at the rate of 7%....

A bond issue with a face amount of $500,000 bears interest at the rate of 7%. The current market rate of interest is 6%. These bonds will sell at a price that is: A. More than $500,000 B. Equal to $500,000 C. Less than $500,000 D. The answer cannot be determined from the information provided

What is the price of a 3-year bond with a coupon rate of 6% and face...

What is the price of a 3-year bond with a coupon rate of 6% and face value of $1,000? Assume the bond is trading at 6% yield, and that coupons are paid semi-annually. Assume semi-annual compounding.

A year ago, you purchased a 5-year bond, paying fixed annual coupons at a rate 5%pa....

A year ago, you purchased a 5-year bond, paying fixed annual coupons at a rate 5%pa. At the time you purchased the bond, the yield to maturity was 5%pa. If you sold the bond after receiving the first interest payment and the bond's yield to maturity had changed to 4%, your annual total rate of return on holding the bond for that year would have been approximately ________. Group of answer choices 8.1% 4.8% 8.6% 7.6% 9.5% PreviousNext

Consider a 30-year bond that pays semi-annual coupons of $500. The face value of the bond...

Consider a 30-year bond that pays semi-annual coupons of $500. The face value of the bond is $100, 000. If the annual yield rate is 3%, calculate the following: a) the annual coupon rate of the bond b) the price of the bond, one period before the first coupon is paid c) the price of the bond, immediately after the 15th coupon is paid d) the price of the bond, 2 months after the 30th coupon is paid *No financial...

Consider a 2-year Treasury bond with a face value of $100 and that pays coupons at...

Consider a 2-year Treasury bond with a face value of $100 and that pays coupons at a rate of 6% semiannually. What is the bonds par yield given the following Treasury zero rates? Maturity (years) Zero rates 0.5 3.0% 1.0 3.3% 1.5 3.6% 2.0 3.9% a) 3.89% b)3.99% c)4.19% d)4.39%

Question

There is a 3-year bond available with a face of PLN 500,000, interest 6% pa, coupons...

Solutions

Expert Solution

Related Solutions

There is a 3-year bond available with a face of PLN 500,000, interest 6% pa, coupons...

Calculate a dirty price of 3-year bond with a face of 1,000,000 PLN, coupons paid each...

Consider a five-year, default-free bond with annual coupons of 6% and a face value of $1,000...

A bond has a face value of $1000 and the coupon rate is 6%. Coupons are...

A bond issue with a face amount of $500,000 bears interest at the rate of 7%....

A bond issue with a face amount of $500,000 bears interest at the rate of 7%....

What is the price of a 3-year bond with a coupon rate of 6% and face...

A year ago, you purchased a 5-year bond, paying fixed annual coupons at a rate 5%pa....

Consider a 30-year bond that pays semi-annual coupons of $500. The face value of the bond...

Consider a 2-year Treasury bond with a face value of $100 and that pays coupons at...