What is the yield to maturity on a 10-year, 9% annual coupon,
$1,000 par value bond that sells for $887.00? That sells for
$1,134.20? What does the fact that a bond sells at a discount or at
a premium tell you about the relationship between and the bond’s
coupon rate?
What are the total return, the current yield, and the capital
gains yield for the discount bond? (Assume the bond is held to
maturity and the company does not default...
.
An investor buys a 10 year, 8% annual coupon bond at par (so
the yield-to-maturity must be 8%), and sells it after three years
(just after the coupon is recieved). Interest rates rise
immediately after the purchase, and the bond’s yield-to-maturity
jumps to 10% and remains there for the rest of the three year
period. Assume coupons are reinvested at the new
yield-to-maturity.
Show the components of the investor’s “total return,” or
portfolio value at the end of the...
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...
A 10-year bond has a 10 percent annual coupon and a yield to
maturity of 12 percent. The bond can be called in 5 years at a call
price of $1,050 and the bond’s face value is $1,000. Which of the
following statements is most correct? Please explain why.
a. The bond’s current yield is greater than 10
percent.
b. The bond’s yield to call is less than 12
percent.
c. The bond is selling at...
1 Calculate the Yield to Maturity (YTM) of a 10-year annual
coupon-ed bond with a coupon rate of 7%, a price of $1050, and a
face value of $1000.
2 a Calculate the Yield to Maturity (YTM) of a 10-year
semiannual coupon-ed bond with a coupon rate of 7%, a price of
$1050, and a face value of $1000.
b Calculate this bond's Current Yield (CY).
3 In previous Questions 4 and 5, with all the same maturity,
coupon...
A 6% coupon, 24-year annual bond has a yield to maturity of
4.4%. Assuming the par value is $1,000 and the YTM does not change
over the next year, what will the price of the bond be today? What
will the bond price be in one year? What is the capital gains yield
for this bond?
A 8.3% coupon, 8-year annual bond has a yield to maturity of
6.3%. Assuming the par value is $1,000 and the YTM does not change
over the next year, what will the price of the bond be today? What
will the bond price be in one year to nearest cent? What is the
capital gains yield for this bond? (4 decimals)
A 10-year maturity bond with par value of $1,000 makes annual
coupon payments at a coupon rate of 8%. Find the bond equivalent
and effective annual yield to maturity of the bond for the
following bond prices. (Round your answers to 2 decimal
places.)
Bond prices: 950, 1000, 1050
What are the Bond Equivalent Annual Yield to Maturity
and Effective Annual Yield to Maturity
The yield to maturity of a 10-year 4% annual coupon bond is
4%.
a.Suppose that you buy the bond today and hold it for 10
years.Assume that the interest rates go up to 5% (100 basis points
increase) after the bond is purchased and before the first coupon
is received. What is your realized rate of return?
b.Suppose that you buy the bond today and hold it for
6years.Assume that the interest rates go up to 5% (100 basis points...
The yield to maturity of a 10-year 4% annual coupon bond is
4%.
a.Suppose that you buy the bond today and hold it for 10
years.Assume that the interest rates go up to 5% (100 basis points
increase) after the bond is purchased and before the first coupon
is received. What is yourrealized rate of return?
b.Suppose that you buy the bond today and hold it for
6years.Assume that the interest rates go up to 5% (100 basis points
increase)...