Question

In: Finance

Consider a bond that pays a 10.00% semi-annual coupon and matures in 10 years. If the...

Consider a bond that pays a 10.00% semi-annual coupon and matures in 10 years. If the current market value of the bond is $1,200, what is the YTM?

Solutions

Expert Solution

The yield to maturity (YTM) is calculated using Rate function in excel below

Therefore, YTM is 7.165%

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

A bond pays a 5% coupon and makes semi-annual payments. The bond has 10 years to...
A bond pays a 5% coupon and makes semi-annual payments. The bond has 10 years to maturity and a YTM of 6%. What is the current bond price?
A bond matures in 15 years and pays an 8 percent annual coupon. The bond has...
A bond matures in 15 years and pays an 8 percent annual coupon. The bond has a face value of $1,000 and currently sells for $985. What is the bond’s current yield and yield to maturity? The face value for WICB Limited bonds is $250,000 and has a 6 percent annual coupon. The 6 percent annual coupon bonds matures in 2035, and it is now 2020. Interest on these bonds is paid annually on December 31 of each year, and...
A bond matures in 15 years and pays an 8 percent annual coupon. The bond has...
A bond matures in 15 years and pays an 8 percent annual coupon. The bond has a face value of $1,000 and currently sells for $985. What is the bond’s current yield and yield to maturity?
A bond matures in 15 years and pays an 8 percent annual coupon. The bond has...
A bond matures in 15 years and pays an 8 percent annual coupon. The bond has a face value of $1,000 and currently sells for $985. What is the bond’s current yield and yield to maturity? $
9. A bond matures in 12 years and pays a 6 percent annual coupon. The bond...
9. A bond matures in 12 years and pays a 6 percent annual coupon. The bond has a face value of $1,000 and currently sells for $890. What is the bond’s current yield and yield to maturity? 10. The face value for Karen’s Limited bonds is $100,000 and has a 2 percent annual coupon. The 2 percent annual coupon bonds matures in 2022, and it is now 2012. Interest on these bonds is paid annually on December 31 of each...
A bond matures in 20 years and pays an 8 percent annual coupon. The bond has...
A bond matures in 20 years and pays an 8 percent annual coupon. The bond has a face value of $1000 and currently sells for $900. What is the bond's current yield and yield to maturity?
A bond has a 11% coupon rate with semi-annual coupons and matures in 9 years. The...
A bond has a 11% coupon rate with semi-annual coupons and matures in 9 years. The bond has a $1,000 face value and a current yield of 14.37%. What is the bond's price? What is the bond's yield to maturity? Enter your answer as a decimal.
Consider a bond that pays $50 semi-annual interest and has a remaining life of 10 years....
Consider a bond that pays $50 semi-annual interest and has a remaining life of 10 years. The bond currently sells for $987 and has a yield to maturity of 10.20%. a. What is the bond’s duration? b. What is its modified duration? c. What is its convexity? d. What percentage change in bond price would be expected for one percent decrease in interest rate?
A bond with a 10% annual coupon matures in 6 years. The bond has a price...
A bond with a 10% annual coupon matures in 6 years. The bond has a price of $1,200. What is the yield to maturity for this bond? Question 3 options: 2.99% 5.94% 5.98% 7.42%
A bond pays a coupon rate of 5% annually and matures in 10 years. The principal...
A bond pays a coupon rate of 5% annually and matures in 10 years. The principal is $10,000 and current market price is $8,500. Suppose the yield increases by 0.05% (0.0005, i.e. 5 bps). What is the new bond price? What is the actual change in price? What is the change in price predicted by modified duration formula? Is this change larger or smaller compared to the actual price change in (c)? Why? How would incorporating convexity help improve duration...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT