Question
In: Finance
Yield to maturity The bond shown in the following table pays interest annually. (Click on the...
Yield to maturity
The
bond shown in the following table pays interest
annually.
(Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)
|
Par value |
Coupon interest rate |
Years to maturity |
Current value |
|
|
$100100 |
1313% |
1818 |
$8080 |
a. Calculate the yield to maturity
(YTM)
for the bond.
b. What relationship exists between the coupon interest rate and yield to maturity and the par value and market value of a bond? Explain.
a. The yield to maturity
(YTM)
for the bond is
nothing%.
(Round to two decimal places.)
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Yield to maturity: The bond shown in the following table pays interest annually. Par value Coupon...
Yield to maturity:
The bond shown in the following table pays interest
annually.
Par value
Coupon interest rate
Years to maturity
Current value
Copy to Clipboard
+
Open in Excel
+
$100100
77%
1010
$5050
a. Calculate the yield to maturity
(YTM)
for the bond.
b. What relationship exists between the coupon interest rate and
yield to maturity and the par value and market value of a bond?
Explain.
a. The yield to maturity
(YTM)
for the bond...
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9.35 percent
9.02 percent
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Calculate the intrinsic value (price) of the bond today if the
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a. What is the price of the 6-year 7.2% coupon bond selling to
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b. What is the price of this bond one year later assuming the
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8. Bond A has a yield to maturity 20% and trades at $100. This bond pays...
8. Bond A has a yield to maturity 20% and trades at $100. This
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maturity is 3 years. a. Calculate the duration of this bond. Note:
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Suppose the coupon rate on a bond is 10% paid annually, the yield to maturity is...
Suppose the coupon rate on a bond is 10% paid annually, the
yield to maturity is 12%, the face value of the bond is $1000, the
maturity is 2 years, and the price of the bond is $966.20.
a. According to his information, you can say that this bond is
sold on the market:
A) at par value
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The present value of a bond that has a yield-to-maturity of 10% and pays a coupon...
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True
False
A five-year bond with a yield of 11% (compounded annually) pays an 8% coupon at the...
A five-year bond with a yield of 11% (compounded annually) pays
an 8%
coupon at the end of each year.
(a) What is the bond’s price?
(b) What is the bond’s duration?
(c) Use the duration to calculate the effect on the bond’s price
of a 0.2% de-
crease in its yield.
(d) Recalculate the bond’s price on the basis of a 10.8% per
annum yield and
verify that the result is in agreement with your answer to
(c).
Face...
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