i) You just purchased a 10-year semi-annual coupon bond with a par value of $1,000 and...

i) You just purchased a 10-year semi-annual coupon bond with a par value of $1,000 and a coupon rate of 8%. The nominal yield to maturity is 7% per annum. Calculate the market price of the bond.

ii)Three years later, immediately after receiving the sixth coupon payment, you sell the bond to your best friend. Your best friend’s nominal yield to maturity is 9% per annum. Calculate the price paid by your best friend.

Solutions

Expert Solution

ii)

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

You just purchased a $1,000 par bond with a 6% semi-annual coupon and 15 years to...

You just purchased a $1,000 par bond with a 6% semi-annual coupon and 15 years to maturity at par. You are hoping that interest rates fall and that you will be able to sell the bond in seven years at a price $1,200. What will the yield to maturity of the bond have to be to get the price you want in seven years? A. 3.15% B. 4.19% C. 4.55% D. 1.57%

What is the YTM of a four-year semi-annual coupon bond with a par value of $1,000...

What is the YTM of a four-year semi-annual coupon bond with a par value of $1,000 and a 6% coupon rate when the bond is priced at $940?

Three years ago you purchased a $1,000 par 12-year bond with a 3.5% semi-annual coupon at...

Three years ago you purchased a $1,000 par 12-year bond with a 3.5% semi-annual coupon at a price of $875. If the current price is $965, what was the yield to maturity of the bond when it was purchased? A. 4.89% B. 3.97% C. 3.87% D. 5.26% You purchased a $1,000 bond with a 4.6% semi-annual coupon and 15 years to maturity four years ago at a price of $855. If the yield has remained constant, what should be the...

A bond with a par value of $1,000 has a 6% coupon rate with semi-annual coupon...

A bond with a par value of $1,000 has a 6% coupon rate with semi-annual coupon payments made on July 1 and January 1. If the bond changes hands on November 1, which of the following is true with respect to accrued interest? The buyer will pay the seller $20 of accrued interest The seller will pay the buyer $20 of accrued interest The buyer will pay the seller $10 of accrued interest The seller will pay the buyer $10...

A 10-year, 10% coupon bond, semi-annual payments, $1,000 Par, is expected to make all coupon payments...

A 10-year, 10% coupon bond, semi-annual payments, $1,000 Par, is expected to make all coupon payments but to pay only 50% of par value at maturity. What is the expected yield on this bond if the bond is purchased for $975? a. 10.00% b. 6.77% c. None of the options are correct. d. 11.68% e. 6.68%

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)

A 10-year maturity bond with par value of $1,000 makes annual coupon payments at a coupon...

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

You just purchased a 30-year bond with 6% annual coupon, par value of $1000, and 15...

You just purchased a 30-year bond with 6% annual coupon, par value of $1000, and 15 years to maturity. The bond makes payments semi-annually and the interest rate in the market is 7.0%. Calculate bond price as of today • $936.74 • $1015.76 • $918.04 • $908.04 You just purchased a 30-year bond with 6% annual coupon, par value of $1000, and 15 years to maturity. The bond makes payments semi-annually and the interest rate in the market is 7.0%....

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)

Today, you bought one corporate semi-annual bond with $1,000 par value, 8% coupon rate, 10 years...

Today, you bought one corporate semi-annual bond with $1,000 par value, 8% coupon rate, 10 years left to maturity. The current interest rate of the bond is 10%. 15. What is the price of the bond today? a. $875.38 b. $877.11 c. $1,000.00 d. $1,135.90 16. How much interest (not just coupon) in total should the corporation pay you in the next five years? a. $400.00 b. $445.20 c. $447.40 d. $447.07 (Hint: you need to distinguish interest from coupon....

Subjects