Question
In: Finance
Jerry's supermakets has $1,000 par value bonds with a coupon rate of 8% per year making...
Jerry's supermakets has $1,000 par value bonds with a coupon rate
of 8% per year making annual coupon payments. if there are 6 year
remaining prior to maturity and the bonds are selling for $970,
what is the annual yield to maturity for these bonds?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Consider a bond (with par value = $1,000) paying a coupon rate of 8% per year...
Consider a bond (with par value = $1,000) paying a coupon rate
of 8% per year semiannually when the market interest rate is only
5% per half-year. The bond has three years until maturity.
a. Find the bond's price today and six months from now after the
next coupon is paid. (Round your answers to 2 decimal places.)
Current price
Price after 6 months
b. What is the total (six-month) rate of return on the bond? (Do
not round intermediate...
An 8% coupon, 30-year maturity bond has a par value of $1,000. Suppose the interest rate...
An 8% coupon, 30-year maturity bond has a par value of $1,000.
Suppose the interest rate is 6% annually. What is the bond value if
it pays annual coupon payments? What is the bond value if it pays
semi-annual coupon payments?
Consider a bond (with par value = $1,000) paying a coupon rate of 9% per year...
Consider a bond (with par value = $1,000) paying a coupon rate
of 9% per year semiannually when the market interest rate is only
5% per half-year. The bond has three years until maturity.
a. Find the bond's price today and six months
from now after the next coupon is paid. (Round your answers
to 2 decimal places.)
b. What is the total (six-month) rate of return
on the bond? (Do not round intermediate calculations. Round
your answer to the...
Consider a bond (with par value = $1,000) paying a coupon rate of 9% per year...
Consider a bond (with par value = $1,000) paying a coupon rate
of 9% per year semiannually when the market interest rate is only
7% per half-year. The bond has three years until maturity.
a. Find the bond's price today and six months
from now after the next coupon is paid. (Round your answers
to 2 decimal places.)
b. What is the total (six-month) rate of return
on the bond? (Do not round intermediate calculations. Round
your answer to the...
A $1,000 par value bond matures in 8 years. It has a 7% coupon rate, with...
A $1,000 par value bond matures in 8 years. It has a 7% coupon
rate, with semi-annual interest payments. The yield (the rate at
which investors are using to calculate the price of the bond) is
8%. What is the fair market value of the bond?
A bond that pays annual coupons has a par value of $1,000, an 8% coupon rate,...
A bond that pays annual coupons has a par value of
$1,000, an 8% coupon rate, 3 years left to maturity, and is
currently priced at a YTM of 6.0%.
(a) Calculate duration and modified duration for the bond.
(b) If the YTM on the bond changes from its current 6.0% up to
8.0%, what price change (% and $) and new price ($) is predicted by
the modified duration calculated in part a.?
(c) What is the size and...
1. Jackson Corp $1,000 par value bonds currently sell for $856.92. The coupon rate is 8%,...
1. Jackson Corp $1,000 par value bonds currently sell for
$856.92. The coupon rate is 8%, paid semi annually. If the bonds
have 8 years before maturity, what is the yield to maturity on the
bonds?
2. If you are willing to pay $1,077 for a 15-year $1,000 par value
bond that pays 9 percent interest semi-annually, what is your
expected rate of return?
3. Gar, Inc. has issued a $1,000 par 9% annual coupon bond
that is to mature...
You purchased a bond with a par value of $1,000 and a coupon rate of 8...
You purchased a bond with a par value of $1,000 and a coupon
rate of 8 percent at a price of $1,100 at the beginning of the
year. The price of the bond was $1,000 at the end of the year.
Which of the following development(s) could explain this
change?
1. The default risk of the bond increased.
2. The YTM of bonds of similar credit risk increased.
3. The YTM of bonds of similar credit risk decreased.
4. The...
Consider a bond with a par value of $1,000, a coupon rate of 8%, and 10...
Consider a bond with a par value of $1,000, a coupon rate of 8%,
and 10 years until maturity. What is the most you should pay for
this asset if your required rate of return for assets like this is
5% and the coupon payments are paid annually? How does your answer
change if the bond is semi-annual? Does the semi-annual bond sell
at a premium or a discount?
21. If a 3-year, semi-annual bond ($1,000 par value) has an annual coupon rate of 8...
21. If a 3-year, semi-annual bond ($1,000 par
value) has an annual coupon rate of 8 percent, and
an annual yield to maturity of 6 percent, then
calculate Macaulay's duration of the bond using
the table format demonstrated in the video
(not the equation)
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