Question
In: Accounting
You purchased a 12-year Treasury bond with a 7 percent coupon rate. The bond’s asked yield...
You purchased a 12-year Treasury bond with a 7 percent coupon rate. The bond’s asked yield is currently 5.5 percent. The settlement of the purchase occurred 20 days after the last coupon payment and there are 160 days before the next. If the bond has a par value of $1,000 and interest is paid semiannually. What is the full price of the bond that you pay to the seller? $1,130.51 $1,090.21 $1,134.40 $1,121.30 $1,144.12
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Wan purchased a 7-year Treasury bond with a coupon rate of j2 = 4.5% p.a. and...
Wan purchased a 7-year Treasury bond with a coupon rate of
j2 = 4.5% p.a. and a face value of $100 that matures at
par and is subject to a 30% tax on interest and capital gain. The
purchase price was $94.230.
a. Use the approximate bond yield formula to estimate the net
yield rate. Give your answer in j2 form, rounded to 3
decimal places.
b. Use linear interpolation to calculate the net yield rate.
Give your answer in...
A bondholder purchased an 8 percent coupon, $1,000 par three-year bond at a 7 percent yield....
A bondholder purchased an 8 percent coupon, $1,000 par
three-year bond at a 7 percent yield. Interest rates then
immediately fell to 6 percent and his bond was called at a price of
$1,040. He reinvested his money and earned 6 percent on the $1,040
for three years. a) Did the call help or hurt the bondholder? (20
marks) b) What was his three-year rate of return on his original
investment? (5 marks)
A bond with a coupon rate of 7 percent sells at a yield to maturity of...
A bond with a coupon rate of 7 percent sells at a yield to
maturity of 8 percent. If the bond matures in 11 years, what is the
Macaulay duration of the bond? What is the modified duration?
A bond with a coupon rate of 7 percent sells at a yield to maturity of...
A bond with a coupon rate of 7 percent sells at a yield to
maturity of 9 percent. If the bond matures in 12 years, what is the
Macaulay duration of the bond? What is the modified duration? (Do
not round intermediate calculations. Round your answers to 3
decimal places.)
Duration
Macaulay
years
Modified
years
Purchased a one year treasury bill that offers an effective annual yield of 12 percent. You...
Purchased a one year treasury bill that offers an effective
annual yield of 12 percent. You are confident that there will be 6
percent rate inflation. The tax rate is 33.33 percent, i.e, the tax
rate is exactly one-third. What after tax real return are you
expecting?
last year you purchased a 10 year semi-annual coupon bond with coupon rate of 12% and...
last year you purchased a 10 year semi-annual coupon bond with
coupon rate of 12% and face value of $1000. the bonds yield to
maturity was 11% then. a year past and the market interest rate
increases by 1 percentage point. your one-year holding period
return is____% (rounded with two decimal places)
What is the yield of a 3-year bond with a coupon rate of 7% and face...
What is the yield of a 3-year bond with a coupon rate of 7% and
face value of $100? Assume the bond is currently trading at a price
of $100, and that coupons are paid semi-annually. Assume
semi-annual compounding.
A ten year bond has a coupon rate of 7% and a yield to maturity of...
A ten year bond has a coupon rate of 7% and a yield to maturity
of 9%, will you be willing to pay $1100 for this bond. Please
explain.
You own a bond with a coupon rate of 6.6 percent and a yield to call...
You own a bond with a coupon rate of 6.6 percent and a yield to
call of 7.5 percent. The bond currently sells for $1,092. If the
bond is callable in five years, what is the call premium of the
bond? (Do not round intermediate calculations. Round your
answer to 2 decimal places.)
You are considering buying a bond with a 10-year maturity. The bond’s coupon rate is 8%...
You are considering buying a bond with a 10-year maturity. The
bond’s coupon rate is 8% and the interest rate is paid
semiannually. If youu want to earn an effective interest rate of
8.16%, how much should you be willing to pay for the bond? Where
the value is 1.000.000.000.
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