Question
In: Finance
1. What is the value of a 10-year bond outstanding with 6% annual required rate and...
1. What is the value of a 10-year bond outstanding with 6%
annual required rate and 4% annual payment?
A.
$852.80
B.
$1097.19
C.
$1000
D.
$760.06
QUESTION 7
1. What is the value of a 10-year bond outstanding with 8
years left in “year-to-maturity” 13% annual required rate and 8%
annual payment?
A.
$760.06
B.
$1000
C.
$1097.19
D.
$852.80
QUESTION 8
1. What is the value of a 10-year bond outstanding with 4
years left in “year-to-maturity” 9% annual required rate and 12%
annual payment?
A.
$1000
B.
$760.06
C.
$852.80
D.
$1097.19
QUESTION 9
1. What is the annual required rate of a 10-year bond that has
12% annual payment and $1192.53 in PV?
A.
7%
B.
9%
C.
14%
D.
16%
QUESTION 10
1. What is the annual required rate of a 10-year bond that has
10% annual payment rate and $791.36 in PV?
A.
14%
B.
7%
C.
9%
D.
16%
Solutions
Expert Solution
1)
Coupon = 0.04 * 1000 = 40
Price = Coupon * [1 - 1 / (1 + r)n] / r + FV / (1 + r)n
Price = 40 * [1 - 1 / (1 + 0.06)10] / 0.06 + 1000 / (1 + 0.06)10
Price = 40 * 7.36009 + 558.39478
Price = $852.80
You can also find this using a financial calculator:
FV 1000
PMT 40
I/Y 6
N 10
CPT PV
2)
Coupon = 0.08 * 1000 = 80
Price = Coupon * [1 - 1 / (1 + r)n] / r + FV / (1 + r)n
Price = 80 * [1 - 1 / (1 + 0.13)8] / 0.13 + 1000 / (1 + 0.13)8
Price = 80 * 4.79877 + 376.15986
Price = $760.06
You can also find this using a financial calculator:
FV 1000
PMT 80
I/Y 13
N 8
CPT PV
3)
Coupon = 0.12 * 1000 = 120
Price = Coupon * [1 - 1 / (1 + r)n] / r + FV / (1 + r)n
Price = 120 * [1 - 1 / (1 + 0.09)4] / 0.09 + 1000 / (1 + 0.09)4
Price = 120 * 3.23972 + 708.42521
Price = $1,097.19
You can also find this using a financial calculator:
FV 1000
PMT 80
I/Y 13
N 8
CPT PV
4)
Coupon = 0.12 * 1000 = 120
Annual required rate = 9%
Keys to use in a financial calculator:
FV 1000
PMT 120
N 10
PV -1192.53
CPT /Y
5)
Coupon = 0.10 * 1000 = 100
Annual required rate = 14%
Keys to use in a financial calculator:
FV 1000
PMT 100
N 10
PV -791.36
CPT /Y
jeff jeffy answered 1 year agoRelated Solutions
What is the annual required rate of a 10-year bond that has 10% annual payment rate...
What is the annual required rate of a 10-year bond that has
10% annual payment rate and $791.36 in PV?
A.14%
B.7%
C.9%
D.16%
How many years left in “year-to-maturity” a 10-year bond
outstanding with 12% annual required rate, 9% annual payment, and
$908.88 in its fair value?
A. 4 years
B.10 years
C.
8 years
D.6 years
How many years left in “year-to-maturity” a 10-year bond
outstanding with 9% annual required rate, 12% annual payment, and
$1134.58 in its...
Bond A: 10-year annual bond, price $1010, coupon rate 6% par $1000 bond B: 10-year semi-annual...
Bond A: 10-year annual bond, price $1010, coupon rate 6% par
$1000 bond B: 10-year semi-annual bond, price $1010, coupon rate
6%, par $1000 Does bond A has a higher cost of debt than bond
B?
2(A) A 10-year bond has a face value of EUR1000 pays a 6% annual coupon rate....
2(A) A 10-year bond has a face value of EUR1000 pays a 6% annual
coupon rate. The required market yield is 6.5%. What is its
convexity?
2(B) A 10-year bond has a face value of EUR1000 pays a 6% annual
coupon rate and is traded at 102%. The market yield is 5.73%. What
are its duration and convexity? If the required yield changes by
+200 basis points, compare the actual bond price change with using
duration and convexity rule to...
1. How many years left in “year-to-maturity” a 10-year bond outstanding with 10% annual coupon rate,$70...
1. How many years left in “year-to-maturity” a
10-year bond outstanding with 10% annual coupon rate,$70 in annual
payment, $925.39 in its present value, and $1,000 in its future
value A. 3 years B. 10 years C. 6 years D. 8 years E. 1
years
2. What is the present value of an outstanding
T-bond with 8 years left in “year-to-maturity”, $1,000
future value, 3% annual coupon rate and $20 in annual payment? A.
892 B. 930 C. 1160 D...
1) A 10-year corporate bond has a coupon rate of 6% with annual payments. If interest...
1) A 10-year corporate bond has a coupon rate of 6% with annual
payments. If interest rates rise to 8% on similar bonds, then what
is the value of the bond in the marketplace?
2) A 10-year corporate bond has a coupon rate of 6% with
quarterly payments. If interest rates rise to 8% on similar bonds,
then what is the value of the bond in the marketplace?
3) A 100-year corporate bond has a coupon rate of 6% with...
1) A 10-year corporate bond has a coupon rate of 6% with annual payments. If interest...
1) A 10-year corporate bond has a coupon rate of 6% with annual
payments. If interest rates rise to 7% on similar bonds then what
is the value of the bond in the marketplace?
2) A 10-year corporate bond has a coupon rate of 6% with annual
payments. If interest rates rise to 5% on similar bonds then what
is the value of the bond in the marketplace?
1) A 10-year coupon bond with coupon rate 12% and semi-annual payment. The required return is...
1) A 10-year coupon bond with coupon rate 12% and semi-annual
payment. The required return is 10%. What is the current value of
such bond?
2) Firm ABC paid an annual dividend of $2.00 per share last
year. Management just announced that future dividends will increase
by 2 percent annually. What is the amount of the expected dividend
in year 5?
1. What is the price of a 6% coupon rate, 10 year maturity bond if the...
1. What is the price of a 6% coupon rate, 10 year maturity bond
if the YTM=5%? (FV=1000)
2. What is the yield on a discount basis of a 2 year discount
bond with a price of $965? (FV=1000)
3. You just bought a car and took out a 72 month loan to pay for
it. If you borrowed $20,000 and your annual interest rate is 3.70%,
what are your monthly payments?
4. What is the YTM of a 5...
A firm issues a 10-year, $1,000 par value bond. The required rate of return is 10%....
A firm issues a 10-year, $1,000 par value bond. The required
rate of return is 10%.
1. What is the yield to maturity on a 10-year, 9% annual coupon,
$1,000 par value bond that sells for $878.00? Another bond that
sells for $1,134.20? What does a bond selling at a discount or at a
premium tell you about the relationship between rd and
the bond’s coupon rate?
2.What are the total return, the current yield, and the capital
gains yield...
What is the YTM of a 10 year, 6% annual coupon bond with a price of...
What is the YTM of a 10 year, 6% annual coupon bond with a price
of $980? (Please answer as a percentage with no percent sign,
showing 4 significant digits.)
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- THIS PROGRAM HAS TO BE WRITTEN IN C Single function to perform the parity computation on...
- Consider a buffer system consisting of Benzoic acid (pKa = 4.20) and sodium benzoate, a) Would...
- Decision Variables S T Minimize 1.8S + 2.20T Subject to: Potassium 5S + 8T >= 200...
- A neurologist needs to counsel a stroke victim and her husband about possible outcomes, treatment options,...
- Case Study: Personal Beliefs in the Workplace Don Shakow was a prominent professional who worked in...
- 1: Competency framework usage is the modern best practice in management. What is meant by competency...
- A 19.34 g mixture of sugar (C12H22O11) and table salt (NaCl) is dissolved in 231 g...
ADVERTISEMENT