Question
In: Finance
Bond 2 Coupon rate 6.8% Annual coupon frequency 2 Par $1,000 Time to maturity (years) 5...
|
Bond 2 |
||
|
Coupon rate |
6.8% |
|
|
Annual coupon frequency |
2 |
|
|
Par |
$1,000 |
|
|
Time to maturity (years) |
5 |
|
a) Compute duration and modified duration for Bond 2 using a discount rate (YTM) of 5%.
b) If the bond initially has a YTM of 5%, what is the estimated price, using modified duration, if the YTM falls to 4.75%?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Bond 2 Coupon rate 6.8% Annual coupon frequency 2 Par $1,000 Time to maturity (years) 5...
Bond 2
Coupon rate
6.8%
Annual coupon frequency
2
Par
$1,000
Time to maturity (years)
5
c) the realized compound yield for
Bond 2 if the current price is $1000 and the
semi-annual coupons are reinvested at an annual rate of 2% until
the bond matures.
d) the realized compound yield for
Bond 2 if the current price is $1000 and the
semi-annual coupons are reinvested at an annual rate of 2% until
the bond is sold in 3 years...
A bond with a $1,000 par, 4 years to maturity, a coupon rate of 5%, and...
A bond with a $1,000 par, 4 years to maturity, a coupon rate of
5%, and annual payments has a yield to maturity of 4.3%. What will
be the percentage change in the bond price if the yield changes
instantaneously to 4.9%?
(Bonds) A bond with a $1,000 par, 4 years to maturity, a coupon rate of 5%,...
(Bonds) A bond with a $1,000 par, 4 years to maturity, a coupon
rate of 5%, and annual payments has a yield to maturity of 4.2%.
What will be the percentage change in the bond price if the yield
changes instantaneously to 4.6%? (If your answer is, e.g., -1.123%,
enter it as -1.123. If the sign of the price change is incorrect,
no credit will be given.)
A bond has a $1,000 par value, 20 years to maturity, and a 5% annual coupon...
A bond has a $1,000 par value, 20 years to maturity, and a 5%
annual coupon and sells for $860. What is its yield to maturity
(YTM)? Round your answer to two decimal places. % Assume that the
yield to maturity remains constant for the next 2 years. What will
the price be 2 years from today? Do not round intermediate
calculations. Round your answer to the nearest cent. $
Bond Principal ($) Time to Maturity (years) Annual Coupon ($) Bond Price ($) Coupon Payment Frequency...
Bond Principal ($)
Time to Maturity (years)
Annual Coupon ($)
Bond Price ($)
Coupon Payment Frequency
100
1.00
0
97
100
2.00
4
100.0
(A)
100
3.00
5
99.0
(A)
100
4.00
6
100.0
(A)
100
5.00
6
98.0
(A)
A = Annual
Compute the continuously compounded yields of these five
bonds.
Compute the continuously compounded zero rates for maturities
of 1,2,3,4, and 5 years.
A bond with a $1,000 par, 4 years to maturity, a coupon rate of 3%, and...
A bond with a $1,000 par, 4 years to maturity, a coupon rate of 3%,
and annual payments has a yield to maturity of 3.3%. What will be
the percentage change in the bond price if the yield changes
instantaneously to 4.7%?
A bond with a $1,000 par, 4 years to maturity, a coupon rate of 3%, and...
A bond with a $1,000 par, 4 years to maturity, a coupon rate of 3%,
and annual payments has a yield to maturity of 3.3%. What will be
the percentage change in the bond price if the yield changes
instantaneously to 4.7%?
A bond with a $1,000 par, 6 years to maturity, a coupon rate of 4%, and...
A bond with a $1,000 par, 6 years to maturity, a coupon rate of
4%, and annual payments has a yield to maturity of 3.6%. What will
be the actual percentage change in the bond price if the yield
changes instantaneously to 4.3%? Round to the nearest 0.001%, drop
the % symbol (e.g., if your answer is, e.g., 1.1234%, enter it as
1.123.)
A $1,000 par-value bond with 5 years of maturity pays a 5% coupon rate, paid annually....
A $1,000 par-value bond with 5 years of maturity pays a 5%
coupon rate, paid annually. What is the value of the bond if your
required rate of return is 5%?
2. A $1,000 par-value bond with 5 years of
maturity pays a 5% coupon rate, paid semi-annually. What is the
value of the bond if your required rate of return is 5%?
3. A $1,000 par-value bond with 5
years of maturity pays a 5% coupon rate, paid semi-annually. What...
1. A $1,000 par-value bond with 5 years of maturity pays a 5% coupon rate, paid...
1. A $1,000 par-value bond with 5 years of maturity pays a 5%
coupon rate, paid annually. What is the value of the bond if your
required rate of return is 5%?
2. A $1,000 par-value bond with 5 years of maturity pays a 5%
coupon rate, paid semi-annually. What is the value of the bond if
your required rate of return is 5%?
3. A $1,000 par-value bond with 5 years of maturity pays a 5%
coupon rate, paid...
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