Consider a ten-year bond with 5%
coupon issued by Good Health Food Stores. The ten-year U.S....
Consider a ten-year bond with 5%
coupon issued by Good Health Food Stores. The ten-year U.S.
Treasury note yields 2.5%. Which of the following is correct?
If GHFS’s credit spread widens and the Treasury yield
increases, the GHFS bond price will surely decline.
If GHFS’s credit spread widens and the Treasury yield
decreases, the GHFS bond price may rise or decline, depending on
the relative sizes of the changes.
If GHFS’s credit spread narrows and the Treasury yield
increases, the GHFS bond price will surely rise.
If GHFS’s credit spread narrows and the Treasury yield
increases, the GHFS bond price may rise or decline, depending on
the relative sizes of the changes.
If GHFS’s credit spread narrows and the Treasury yield does not
change, the GHFS bond price will surely rise.
A,B,D,E
I have the answers but can you please explain why they are
Consider a 4-year, 5% annual coupon bond with a face value of
$10,000, which was issued three years ago. The bond just paid the
coupon. Therefore, this bond has one year to maturity, and the next
payment of the face and coupon will be made in exactly one year,
after which the bond will cease to exist. If the bond defaults
before next year, it will pay total of $8,000 in one year. The
effective 1-year risk-free rate is 3.55%....
Ten-year zero coupon bonds issued by the U.S. Treasury have a
face value of $1,000 and interest is compounded semiannually. If
similar bonds in the market yield 7.8 percent, what is the value of
these bonds? (Round answer to 2 decimal places, e.g. 15.25.)
Cullumber Real Estate Company management is planning to fund a
development project by issuing 10-year zero coupon bonds with a
face value of $1,000. Assuming semiannual compounding, what will be
the price of these bonds if...
Suppose a ten-year bond $1,000 bond with a 5% coupon rate that
pays annual coupons is initially trading at par (at $1,000). After
5 years time, the bond’s yield to maturity falls to 4%. If you sell
the bond after 5 years, what price will you receive
Consider a(n) Ten-year, 12.5 percent annual coupon bond with a
face value of $1,000. The bond is trading at a rate of 9.5 percent.
a. What is the price of the bond? b. If the rate of interest
increases 1 percent, what will be the bond’s new price? c. Using
your answers to parts (a) and (b), what is the percentage change in
the bond’s price as a result of the 1 percent increase in interest
rates? (Negative value should...
A ten-year annual pay bond with a 5% coupon rate is trading with
a market yield of 7.75%. What is the percentage change in price if
the market yield decreases by 75 basis points immediately after the
bond is issued?
5‐year bond is issued with a 5% coupon. After 1 year and 40 days
from its issue, the owner decides to sell it. Calculate the price
at which the buyer sells the bond (clean price) and the actual
price received by the seller. Consider an interest rate of 3%.
Clean price: Answer % (rounded to the second decimal)
Price paid by the buyer: Answer % (rounded to the second
decimal)
Use 1 year=365 days for calculations
Please answer the 7 questions. Thank you!
1. Ten-year zero coupon bonds issued by the U.S. Treasury have a
face value of $1,000 and interest is compounded semiannually. If
similar bonds in the market yield 11.6 percent, what is the value
of these bonds? Round answer to 2 decimal places
2. Cullumber Real Estate Company management is planning to fund
a development project by issuing 10-year zero coupon bonds with a
face value of $1,000. Assuming semiannual compounding, what will...
IBM has just issued a callable (at par) 5 year, 9% coupon bond
with quarterly coupon payments. The bond can be called at par in
two years or anytime thereafter on a coupon payment date. It has a
price of $102 per $100 face value, implying a yield to maturity of
8.78%. What is the bond's yield to call?
8.78%
6.86%
8.15%
7.91%
Three years ago, Brad Smith bought a ten-year, 6% coupon bond
issued by Nvidia Corporation for $1,027.90. These bonds pay coupons
semi-annually. If he sells this bond at the current price of
$1,141.35, what will be his realized yield on this bond?
Group of answer choices
9.12%
4.99%
4.56%
2.03%
9.98%