Question
In: Finance
1. What is the price for a $1,000 par, 10 year, 8% coupon bond with semiannual...
1. What is the price for a $1,000 par, 10 year, 8% coupon bond with semiannual payments and a 7% yield to maturity?
A. 1,105.94
B. 1,106.78
C. 1,071.06
D. 883.31
E. 907.99
2. What is the price for a $1,000 par, 20 year, 8% coupon bond with semiannual payments and a 9% yield to maturity?
A. 1,071.06
B. 1,106.78
C. 1,105.94
D. 907.99
E. 883.31
3. What is the price for a $1,000 par, 20 year, 8% coupon bond with annual payments and a 7% yield to maturity?
A. 1,071.06
B. 1,105.94
C. 883.31
D. 907.99
E. 1,106.78
4. What is the price for a $1,000 par, 5 year, 6% coupon bond with annual payments and a 9% yield to maturity?
A. 1,105.94
B. 883.31
C. 1,071.06
D. 1,106.78
E. 907.99
Thank you in advance!!!
Solutions
Expert Solution
| Q1. | ||||||
| Par value of bonds | 1000 | |||||
| Semi annul cash interest (1000*8%*6/12) | 40 | |||||
| Annuity for 20 periods at 3.50% | 14.2124 | |||||
| PVF at 20th period at 3.50% | 0.502566 | |||||
| Present value of Interest | 568.496 | |||||
| Present value of maturity | 502.566 | |||||
| Issue price | 1071.062 | |||||
| Answer is C. 1071.06 | ||||||
| Q2. | ||||||
| Par value of bonds | 1000 | |||||
| Semi annul cash interest (1000*8%*6/12) | 40 | |||||
| Annuity for 40 periods at 4.50% | 18.40158 | |||||
| PVF at 40th period at 4.50% | 0.171929 | |||||
| Present value of Interest | 736.0632 | |||||
| Present value of maturity | 171.929 | |||||
| Issue price | 907.9922 | |||||
| Answer is D. 907.99 | ||||||
| Q3. | ||||||
| Par value of bonds | 1000 | |||||
| Aannul cash interest (1000*8%) | 80 | |||||
| Annuity for 20 periods at 7% | 10.59401 | |||||
| PVF at 20th period at 7% | 0.258419 | |||||
| Present value of Interest | 847.5208 | |||||
| Present value of maturity | 258.419 | |||||
| Issue price | 1105.94 | |||||
| Answer is B. 1105.94 | ||||||
| Q4. | ||||||
| Par value of bonds | 1000 | |||||
| Aannul cash interest (1000*6%) | 60 | |||||
| Annuity for 5 periods at 9% | 3.88965 | |||||
| PVF at 5th period at 9% | 0.649931 | |||||
| Present value of Interest | 233.379 | |||||
| Present value of maturity | 649.931 | |||||
| Issue price | 883.31 | |||||
| Answer is B. 883.31 | ||||||
jeff jeffy answered 1 year agoRelated Solutions
A 15-year, $1,000 par value, 10% semiannual coupon bond has a price of $1,190 and it...
A 15-year, $1,000 par value, 10% semiannual coupon bond has a
price of $1,190 and it is callable in 5 years at a call price of
$1,050. What is the bond’s nominal yield to call (YTC)?
a.
6.37%
b.
6.73%
c.
7.60%
d.
7.83%
e.
3.18%
A 15-year, $1,000 par value, 10% semiannual coupon bond has a price of $1,190 and it...
A 15-year, $1,000 par value, 10% semiannual coupon bond has a
price of $1,190 and it is callable in 5 years at a call price of
$1,050. What is the bond’s nominal yield to call (YTC)?
a.
6.37%
b.
6.73%
c.
7.60%
d.
7.83%
e.
3.18%
Mary buys a 10-year, 1,000 par value bond with 8% semiannual coupons. The price of the...
Mary buys a 10-year, 1,000 par value bond with 8% semiannual
coupons. The price
of the bond to earn a yield of 6% convertible semiannually is
1,204.15. The redemption value is more
than the par value. Calculate the price Mary would have to pay for
the same bond to yield 10%
convertible semiannually. Show all work.
1. What is the yield to maturity for a $1,000 par, 10 year, 8% coupon bond...
1. What is the yield to maturity for a $1,000 par, 10
year, 8% coupon bond with semiannual payments, callable in 3 years
for $1,050 that sells for $1,071.06?
A. 13.2%
B. 5.4%
C. 7.0%
D. 9.0%
2. What is the yield to call for a $1,000 par, 10 year,
8% coupon bond with semiannual payments, callable in 3 years for
$1,050 that sells for $1,071.06?
A. 14.2%
B. 6.9%
C. 9.0%
D. 5.4%
3. What is the yield to...
What is the price of a 10-year, $1,000 bond with a 6% coupon rate and semiannual...
What is the price of a 10-year, $1,000 bond with a 6% coupon
rate and semiannual coupons if the bond’s yield to maturity is 9%
(APR with semiannual compounding)?
$864.10
$1,038.07
$804.88
$1,077.95
Consider a project with the following cash flows:
Year 0 1 2 3 4
Cash
Flow -10,000 4,000 4,000 4,000 4,000
What is the internal rate of return (IRR) of the above
project?
23.23%
22.05%
21.86%
20.82%
Security: AAA AA A BBB
BB
Yield
(%): 5.0 5.5 6.0 6.4 8.0
A mining company needs to raise $100 million in order to begin
open pit mining...
A 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called in...
A
20-year, 8% semiannual coupon bond with a par value of $1,000 may
be called in 5 years at a call price of $1,040. The bond sells for
$1,100. (Assume that the bond has just been issued.)
Basic Input Data:
Years to maturity:
20
Periods per year:
2
Periods to maturity:
40
Coupon rate:
8%
Par value:
$1,000
Periodic payment:
$40
Current price
$1,100
Call price:
$1,040
Years till callable:
5
Periods till callable:
10
a. What is the
bond's...
Suppose a 10-year, 10 percent, semiannual coupon bond with a par value of $1,000 is currently...
Suppose a 10-year, 10 percent, semiannual coupon bond with a par
value of $1,000 is currently selling for $1,135.90, producing a
nominal yield to maturity of 8 percent. However, the bond can be
called after 5 years for a price of $1,050.
a. What is the bond's nominal yield to call (YTC)?
b. If you bought this bond, do you think you would be more
likely to earn the YTM or the YTC? Why
Assuming semiannual compounding, a 10-year zero coupon bond with a par value of $1,000 and a...
Assuming semiannual compounding, a 10-year zero coupon bond with
a par value of $1,000 and a required return of 11.8% would be
priced at _________.
$317.75
$327.78
$894.45
$944.29
A 10-year, 12 % semiannual coupon bond with a par value of $1,000 may be called...
A 10-year, 12 % semiannual coupon bond with a par value of
$1,000 may be called in 5 years, at a call price of $1,060. The
bond sells for $1,300. (Assume the bond has just been issued).
a. What is the bond’s yields to maturity?
b. What is the bond’s current yield?
c. What is the bond’s capital gain or loss yield in the first
year?
d. What is the bond’s yield to call?
1. What is the price of a $1,000 par value bond with an 8% coupon rate paid...
1. What is
the price of a $1,000 par value bond with an 8% coupon rate paid
annually, if the bond is priced to yield 8% and has 9 years to
maturity?
2. What
would be the price of the bond in #1 if the yield decreased to
6%?
3. What
would be the price of the bond in #1 if the yield rose to 10% and
was callable at 110% of par in 4 years?
4. What is
the yield...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Sodium-coupled transport is an important way of moving molecules in and out of the cell. Cardiac...
- Explain why it is beneficial for regulation of fasting blood glucose concentrations that the liver express...
- ANZflix, a media-services provider, charges subscribers $13.49 per month. To attract more customers, the Management and...
- Consider Transaction Processing Systems, Management Information Systems, and Decision Support Systems. A regional sales manager is...
- Create a Use Case table and diagram for creating a business user based on career fair...
- A 10 kg block is placed on an inclined plane that is at an angle of...
- Auxin, Jasmonic acid and Gibberellin have the same basic signalling pathway. Create a diagram of this...
ADVERTISEMENT