Question
In: Accounting
You bought a $1,000, 20-year 12% annual coupon bond at issue. Immediately thereafter the YTM had...
You bought a $1,000, 20-year 12% annual coupon bond at issue. Immediately thereafter the YTM had changed to 10%.
1)Find the total interest at the end of year 5. Express your answer in dollar and cents.
2)Find the interest-on-interest at the end of year 5. Express your answer in dollar and cents.
3)Find the capital gain at the end of year 5. Express your answer in dollar and cents.
4)Find the total income at the end of year 5. Express your answer in dollar and cents.
5)Find the realized return at the end of year 5. Express your answer as a percentage with 3 digits after the decimal point.
Please show the correct answer and explanation, Thanks!
Solutions
ekkarill92 answered 1 year agoRelated Solutions
You bought a $1,000, 20-year 12% annual coupon bond at issue. Immediately thereafter the YTM had...
You bought a $1,000, 20-year 12% annual coupon bond at issue.
Immediately thereafter the YTM had changed to 10%.
1)Find the total interest at the end of year 5. Express your
answer in dollar and cents.
2)Find the interest-on-interest at the end of year 5. Express
your answer in dollar and cents.
3)Find the capital gain at the end of year 5. Express your
answer in dollar and cents.
4)Find the total income at the end of year 5. Express...
What is the YTM of a four-year semi-annual coupon bond with a par value of $1,000...
What is the YTM of a four-year semi-annual coupon bond with a
par value of $1,000 and a 6% coupon rate when the bond is priced at
$940?
What is the YTM on a 10%, 20-year simi-annual coupon bond that that currently trades for...
What is the YTM on a 10%, 20-year simi-annual coupon bond that
that currently trades for $1,013?
A 20 year bond pays an annual coupon of 6%. The current YTM is 8% 1)...
A 20 year bond pays an annual coupon of 6%. The current YTM is
8%
1) What is the duration of this bond? (Use the excel file for
Chapter 11 to help you figure out the answer)
2) If YTM decreases to 7.8%, what is the change to bond price
according to the duration formula? What is the change to bond price
predicted by bond value formula?
Thank you for answering the question!!!!!
Consider a 3-year maturity annual 9% coupon paying bond with a YTM of 12%. a. What...
Consider a 3-year maturity annual 9% coupon paying bond with a
YTM of 12%.
a. What is the Duration of this bond?
b. What will be the predicted price of this bond if the market
yield increases by 100 basis points. [Remember, 100 basis points =
1% point]? You must use the duration (calculated in the part above)
to get full points for this question.
What is the YTM on a 10%, 20-year simi-annual coupon bond thatthat currently trades for...
What is the YTM on a 10%, 20-year simi-annual coupon bond that
that currently trades for $600?
A 12-year semiannual bond with a coupon rate of 6% has a face value of $1,000 and a YTM of 7%. The price of the bond is
Question 1 A 12-year semiannual bond with a
coupon rate of 6% has a face value of $1,000 and a YTM of 7%. The
price of the bond isQuestion 1 options:912.85914.25916.36919.71920.57Question 2 A 4-year discount bond with a face
value of $1,000 sells at $915. The YTM of the bond isQuestion 2 options:2.24%2.52%2.83%3.21%3.48%Question 3 A 7-year semiannual bond with a face
value of $1,000 and a coupon rate of 8% sells at $974. The YTM of
the bond isQuestion 3 options:4.3%5.5%6.5%7.2%8.5%Question 4 Consider a...
You bought an 8% annual coupon, 10 year maturity bond ($1,000 par value) when the discount...
You bought an 8% annual coupon, 10 year maturity bond ($1,000
par value) when the discount rate was 9%. A year later, the
discount rate was 10%. What is your holding period rate of return
over the year? Please also include financial calculator
calculations.
A bond had an issue price of $1,000, a redemption price of $1,000, a coupon rate...
A bond had an issue price of $1,000, a redemption price
of $1,000, a coupon rate of 8%, and pays semiannual interest on Feb
1 and Aug 1. On Oct 1, 2017, an investor buys the bond for $1,040.
The investor sells the bond on May 1, 2019 for $1,050.
a. What is the investor’s basis in the
bond?
b. If the investor is a cash basis taxpayer how much
interest income must the investor include in income in 2017,...
Lucia just bought one coupon bond with a principal amount of $1,000 with an annual coupon...
Lucia just bought one
coupon bond with a principal amount of $1,000 with an annual coupon
rate of 7.1%. The bond pays annual interest payment and will mature
in three years. The yield to maturity of this coupon bond is 2.31%.
How much did Lucia pay to buy this 3-year coupon bond?
Please round your
answer to the second decimal. E.g. 1234.56
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