Question
In: Finance
You find a bond with 29 years until maturity that has a coupon rate of 9.5...
You find a bond with 29 years until maturity that has a coupon rate of 9.5 percent and a yield to maturity of 8.9 percent. Suppose the yield to maturity on the bond increases by 0.25 percent.
a. What is the new price of the bond using duration and using the bond pricing formula?
Estimated price:
Actual price:
b. Now suppose the original yield to maturity is increased by 1 percent. What is the new price of the bond?
Estimated price:
Actual price:
Solutions
Expert Solution
ANSWER IN THE IMAGE ((YELLOW HIGHLIGHTED). FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.
jeff jeffy answered 1 year agoRelated Solutions
You find a bond with 25 years until maturity that has a coupon rate of 10.0...
You find a bond with 25 years until maturity that has a coupon
rate of 10.0 percent and a yield to maturity of 8.5 percent.
Suppose the yield to maturity on the bond increases by 0.25
percent.
a. What is the new price of the bond using
duration and using the bond pricing formula? (Do not round
intermediate calculations. Round your answers to 2 decimal
places.)
estimate price
actual price
b. Now suppose the original yield to maturity
is increased...
You find a bond with 27 years until maturity that has a coupon rate of 5.5...
You find a bond with 27 years until maturity that has a coupon
rate of 5.5 percent and a yield to maturity of 5 percent. Suppose
the yield to maturity on the bond increases by 0.25 percent.
a. What is the new price of the bond using
duration and using the bond pricing formula? (Do not round
intermediate calculations. Round your answers to 2 decimal
places.)
Estimated price:
Actual price:
b. Now suppose the original yield to maturity
is increased...
You find a bond with 21 years until maturity that has a coupon rate of 6.0...
You find a bond with 21 years until maturity that has a coupon
rate of 6.0 percent and a yield to maturity of 5.2 percent. Suppose
the yield to maturity on the bond increases by 0.25 percent.
a. What is the new price of the bond using
duration and using the bond pricing formula? (Do not round
intermediate calculations. Round your answers to 2 decimal
places.)
estimated price
actual price
b. Now suppose the original yield to maturity
is increased...
You find a bond with 21 years until maturity that has a coupon rate of 6.0...
You find a bond with 21 years until maturity that has a coupon
rate of 6.0 percent and a yield to maturity of 5.2 percent. Suppose
the yield to maturity on the bond increases by 0.25 percent.
a. What is the new price of the bond using
duration and using the bond pricing formula? (Do not round
intermediate calculations. Round your answers to 2 decimal
places.)
Estimated price:
Actual Price:
b. Now suppose the original yield to maturity
is increased...
A 9.5% coupon rate bond (that pays interest every six months), with 4 years until maturity...
A 9.5% coupon rate bond (that pays interest every six months),
with 4 years until maturity is selling at $950. An investor with a
10 required rate of return ask your advice. What is your advice
regarding the purchase of the bond?
Select one:
A. don't purchase the bond because the bond is overvalued by
$34.15
B. purchase the bond because the bond is undervalued by
$34.15
C. don't purchase because the bond is overvalued
D. purchase the bond because...
A 9.5% coupon rate bond (that pays interest every six months), with 4 years until maturity...
A 9.5% coupon rate bond (that pays interest every six months),
with 4 years until maturity is selling at $950. An investor with a
10 required rate of return ask your advice. What is your advice
regarding the purchase of the bond?
Seleccione una:
A.purchase the bond because the bond is undervalued by
$33.84
B.not enough data to answer
C.don't purchase because the bond is overvalued
D.don't purchase the bond because the bond is overvalued by
$34.15
E.purchase the bond...
A bond has a coupon rate of 7% and has 5 years until maturity. If the...
A bond has a coupon rate of 7% and has 5 years until maturity.
If the current yield to maturity is 5%, what is the price of the
bond? What is the amount of the annual interest payment paid to the
bondholder?
A bond with 22 years until maturity has a coupon rate of 7.8 percent and a...
A bond with 22 years until maturity has a coupon rate of 7.8
percent and a yield to maturity of 6.3 percent. What is the price
of the bond?
A bond has a coupon rate of 10 percent and 4 years until maturity. If the...
A bond has a coupon rate of 10 percent and 4 years until
maturity. If the yield to maturity is 10.3 percent, what is the
price of the bond?
1. A bond has a coupon rate of 7% and has 5 years until maturity and...
1. A bond has a coupon rate of 7% and has 5 years until maturity
and the yield to maturity is 5%. (4 points) a. What is the price of
the bond? ___________________ (2 points) b. How much annual
interest is paid to the bondholder? _____________ (2 points) 2. A
zero-coupon bond with a 20-year maturity, has a yield to maturity
of 6% and a par value of $100,000? a. What is the price of the
bond? ______________. (2 points)...
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