Question
In: Finance
1. A bond was recently quoted at 98. Its face is $1,000 and its coupon is...
1. A bond was recently quoted at 98. Its face is $1,000 and its coupon is 5%. It matures in 15 years.
a. Should you buy the bond if your discount rate is 6%? Why/why not?
b. If your discount rate is 4%, should you buy the above bond? Explain.
c. Suppose the quote for the bond was 101 rather than 98 and your discount rate is 4%. Should you buy the bond? Explain.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
What is the price of a $1,000 face value bond if the quoted price is 100.3?
What is the price of a $1,000 face value bond if the quoted
price is 100.3?
You own a bond that is currently quoted at 97, has a face of $1,000, a...
You own a bond that is currently quoted at 97, has a face of
$1,000, a coupon of 6% and matures in 10 years. You are considering
selling the bond.
Should you sell it if your discount rate is 7%? Explain.
Suppose the bond is quoted at 89. Should you sell it?
Explain.
What is the lowest price for which you would sell the bond?
Explain
***Please provide excel formula breakdown if you can please
*****
Bond A is a 10% coupon bond with a face value of $1,000 and a maturity...
Bond A is a 10% coupon bond with a face value of $1,000 and a
maturity of 3 years. The discount rate (required return, or
interest rate) is 8% now or in the future.
A. What is the bond price now, in year 1, in year 2, and in year
3
(P0,P1,P2 and P3)?
B. If you buy the bond now and hold it for one year, what is
the
(expected) rate of return?
C. If you buy...
A. Bond Prices A $1,000 par bond that pays interest semiannually has a quoted coupon rate...
A. Bond Prices A $1,000 par bond that pays
interest semiannually has a quoted coupon rate of 7%, a promised
yield to maturity of 7.6% and exactly 4 years to maturity. What is
the bond's current value?
B. Bond Prices A $1,000 par
bond that pays interest semiannually has a quoted coupon rate of
6%, a promised yield to maturity of 4.8% and exactly 12 years to
maturity. The present value of the coupon stream represents ______
of the total...
Bond Prices A $1,000 par bond that pays interest semiannually has a quoted coupon rate of...
Bond Prices A $1,000 par bond that pays
interest semiannually has a quoted coupon rate of 4%, a promised
yield to maturity of 3.5% and exactly 12 years to maturity. The
present value of the coupon stream represents ______ of the total
bond's value.
A.)37.1%
B.)38.2%
C.)39.5%
D.)36.0%
You intend to purchase a 1-year, $1,000 face value bond. Coupon rate of this bond is...
You intend to purchase a 1-year, $1,000 face value bond. Coupon
rate of this bond is 18%. Market interest rate is 24 percent.
Coupon payments are semiannual, what is the duration of the bond?
(Answer is rounded)
You intend to purchase a 1-year, $1,000 face value bond. Coupon rate of this bond is...
You intend to purchase a 1-year, $1,000 face value bond. Coupon
rate of this bond is 8%. Market interest rate is 5 percent. Coupon
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is rounded)
1) A Sprint bond has a face value of $1,000, a coupon rate of 7.75%, with...
1) A Sprint bond has a face value of $1,000, a coupon rate of
7.75%, with coupons paid semi-annually, and 15 years to maturity.
If the effective annual return for bonds of comparable risk is
7.75%, the price that you should be willing to pay for this bond
is?
2) A corporate bond with a face value of $1,000 and
coupons paid semi-annually, sells for
$1,058.39. The term to maturity is 14.5 years. If the yield to
maturity of similar bonds...
Question 1:: Consider a corporate bond with the face value of $1,000, the coupon rate of...
Question 1::
Consider a corporate bond with the face value of $1,000, the
coupon rate of 8% per annum, paying coupons semi-annually and the
remaining term to maturity of 6 years. The current required
yield-to-maturity of this bond is 6% per annum. Suppose an investor
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A semiannual payment bond with a $1,000 par has a 7 percent quoted coupon rate, a...
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maturity. Find the bond's duration.
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