Question
In: Finance
An investor purchased the following five bonds. Each bond had a par value of $1,000 and...
An investor purchased the following five bonds. Each bond had a par value of $1,000 and a 9% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates fell, and each then had a new YTM of 5%. What is the percentage change in price for each bond after the decline in interest rates? Fill in the following table. Enter all amounts as positive numbers. Do not round intermediate calculations. Round your monetary answers to the nearest cent and percentage answers to two decimal places.
Price @ 9% Price @ 5% Percentage Change
10-year, 10% annual coupon
10-year zero
5-year zero
30-year zero
$100 perpetuity
Solutions
jeff jeffy answered 1 year agoRelated Solutions
An investor purchased the following five bonds. Each bond had a par value of $1,000 and...
An investor purchased the following five bonds. Each bond had a
par value of $1,000 and a 8% yield to maturity on the purchase day.
Immediately after the investor purchased them, interest rates fell,
and each then had a new YTM of 7%. What is the percentage change in
price for each bond after the decline in interest rates? Fill in
the following table. Enter all amounts as positive numbers. Do not
round intermediate calculations. Round your monetary answers to...
An investor purchased the following five bonds. Each bond had a par value of $1,000 and...
An investor purchased the following five bonds. Each bond had a
par value of $1,000 and an 8% yield to maturity on the purchase
day. Immediately after the investor purchased them, interest rates
fell, and each then had a new YTM of 6%. What is the percentage
change in price for each bond after the decline in interest rates?
Fill in the following table. Enter all amounts as positive numbers.
Do not round intermediate calculations. Round your monetary answers
to...
An investor purchased the following five bonds. Each bond had a par value of $1,000 and...
An investor purchased the following five bonds. Each bond had a
par value of $1,000 and a 11% yield to maturity on the purchase
day. Immediately after the investor purchased them, interest rates
fell, and each then had a new YTM of 5%. What is the percentage
change in price for each bond after the decline in interest rates?
Fill in the following table. Enter all amounts as positive numbers.
Do not round intermediate calculations. Round your monetary answers
to...
An investor purchased the following 5 bonds. Each bond had a par value of $1,000 and...
An investor purchased the following 5 bonds. Each bond had a par
value of $1,000 and a 10% yield to maturity on the purchase day.
Immediately after the investor purchased them, interest rates fell,
and each then had a new YTM of 5%. What is the percentage change in
price for each bond after the decline in interest rates? (Round all
the answers below to two decimal places)
Price 10%
Price 5%
Percentage Change
10-year, 10% annual coupon
10-year...
An investor purchased the following 5 bonds. Each bond had a par value of $1,000 and...
An investor purchased the following 5 bonds. Each bond had a par
value of $1,000 and an 8% yield to maturity on the purchase day.
Immediately after the investor purchased them, interest rates fell,
and each then had a new YTM of 6%. What is the percentage change in
price for each bond after the decline in interest rates? Fill in
the following table. Round your answers to the nearest cent or to
two decimal places. Enter all amounts as...
INTEREST RATE SENSITIVITY An investor purchased the following 5 bonds. Each bond had a par value...
INTEREST RATE SENSITIVITY
An investor purchased the following 5 bonds. Each bond had a par
value of $1,000 and an 10% yield to maturity on the purchase day.
Immediately after the investor purchased them, interest rates fell,
and each then had a new YTM of 5%. What is the percentage change in
price for each bond after the decline in interest rates? Fill in
the following table. Round your answers to the nearest cent or to
two decimal places. Enter...
An investor purchased the following three bonds. Each bond has a par value of $500....
An investor purchased the following three bonds. Each bond has a
par value of $500. Each bond has a 5% yield on maturity on purchase
day. Immediately after the purchase, the interest rate fell, and
each had a new yield to maturity of 4%. What is the percentage
change in the price of each bond after the fall in interest
rates? Please complete the table below:
Bond Price
at
5% Price
at
4%
Percentage Change
5
year, 5% annual
coupon ___________ ________
________...
An investor just purchased a 5-year $1,000 par value bond. The coupon rate on this bond...
An investor just purchased a 5-year $1,000 par value bond. The
coupon rate on this bond is 10% annually, with interest paid every
year. If the investor expects to earn 12% simple rate of return,
how much the investor should pay for it?
On July 1, 2013 an investment manager purchased five-hundred $1,000 par value bonds with an 8.75%...
On July 1, 2013 an investment manager purchased five-hundred
$1,000 par value bonds with an 8.75% coupon rate for $467,000. The
bonds mature on July 15, 2021. a. According to this information,
would you expect that the rates being offered by similar
investments on the open market carry a rate that is higher, or
lower, than the coupon rate? Explain. b. Find the current yield AND
the yield to maturity. Show your work.
On July 1, 2013 an investment manager purchased five-hundred $1,000 par value bonds with an 8.75%...
On July 1, 2013 an investment manager purchased
five-hundred $1,000 par value bonds with an 8.75% coupon rate for
$467,000. The bonds mature on July 15, 2021.
a. According to this information, would you expect that
the rates being offered by similar investments on the open market
carry a rate that is higher, or lower, than the coupon rate?
Explain.
b. Find the current yield AND the yield to maturity.
Show your work.
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