Question

In: Finance

What is the yield to maturity of a zero that has 10 years until the maturity...

What is the yield to maturity of a zero that has 10 years until the maturity and that is sold for $567.55? Answer in the percent format. Round to the nearest hundredth percent. Do not include the percent sign in your answer. (For example, if your answer is 5.67%, type 5.67 without % sign)

Solutions

Expert Solution


Related Solutions

Consider the following $1,000 par value zero-coupon bonds: Bond Years until Maturity Yield to Maturity A...
Consider the following $1,000 par value zero-coupon bonds: Bond Years until Maturity Yield to Maturity A 1 7.25 % B 2 8.25 C 3 8.75 D 4 9.25 a. According to the expectations hypothesis, what is the market’s expectation of the one-year interest rate three years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What are the expected values of next year’s yields on bonds with maturities of (a) 1 year; (b) 2...
Consider the following $1,000 par value zero-coupon bonds: Bond Years until Maturity Yield to Maturity A...
Consider the following $1,000 par value zero-coupon bonds: Bond Years until Maturity Yield to Maturity A 1 8.50 % B 2 9.50 C 3 10.00 D 4 10.50 a. According to the expectations hypothesis, what is the market’s expectation of the one-year interest rate three years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What are the expected values of next year’s yields on bonds with maturities of (a) 1 year; (b) 2...
A zero-coupon bond has 9 years to maturity and a yield of 5%. What is the...
A zero-coupon bond has 9 years to maturity and a yield of 5%. What is the value of the bond?
A zero coupon bond with 2.5 years to maturity has a annualized yield to maturity of...
A zero coupon bond with 2.5 years to maturity has a annualized yield to maturity of 5%. A 3-year maturity annual-pay coupon bond has as face value of $1000 and a 5% coupon rate. The coupon bond also has a yield to maturity of 5%. Please calculate the duration of each bond. Which bond has the higher duration and why? Using the formula that approximates bond price change as a function of the duration, please calculate the price change of...
A zero-coupon bond with 4 years to maturity and the yield to maturity of 8%. When...
A zero-coupon bond with 4 years to maturity and the yield to maturity of 8%. When the yield increases, the duration of this bond decreases. a. True b. False 2) A bond issuer often repurchases Callable bonds for a discount bond. a. True b. False Credit Default Swap (CDS) is an insurance policy on default risk of corporate bond or loan. a. True b. False 4) The delivery of the underlying asset is seldom made in forward contracts while the...
A 4% annual coupon bond has 5 years remaining until maturity and is priced to yield...
A 4% annual coupon bond has 5 years remaining until maturity and is priced to yield 6%. (a) What is the price per 100 of par? (b) For this bond, estimate the price value of a basis point by first considering an increase in yield and then a decrease in yield.   (c) Now show that for very small price changes, the absolute value of a bond’s price change does not differ much conditional on whether the yield change is a...
The current yield curve for default-free zero-coupon bonds is as follows: Maturity (Years) YTM 1 10%...
The current yield curve for default-free zero-coupon bonds is as follows: Maturity (Years) YTM 1 10% 2 11% 3 12% All bonds considered in this question have a face value of $1,000. Assume that the pure expectations hypothesis of the term structure holds. If market expectations are accurate, what are the expected yields to maturity on 1- and 2-year zero coupon bonds next year? If you purchase a 3-year zero-coupon bond now, what is the expected total rate of return...
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon...
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 7.7%, and sells for $1,130. Interest is paid annually. a. If the bond has a yield to maturity of 10.3% 1 year from now, what will its price be at that time? (Do not round intermediate calculations.) b. What will be the annual rate of return on the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to...
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon...
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 7.1%, and sells for $1,190. Interest is paid annually. (Assume a face value of $1,000 and annual coupon payments.) a. If the bond has a yield to maturity of 10.9% 1 year from now, what will its price be at that time? (Do not round intermediate calculations. Round your answer to nearest whole number.) b. What will be the rate of return...
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon...
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 7.6%, and sells for $1,140. Interest is paid annually. (Assume a face value of $1,000 and annual coupon payments.) a. If the bond has a yield to maturity of 10.4% 1 year from now, what will its price be at that time? (Do not round intermediate calculations. Round your answer to nearest whole number.) b. What will be the rate of return...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT