In: Finance
Five years ago, the City of Baltimore sold at par a $1,000 bond
with a coupon...
Five years ago, the City of Baltimore sold at par a $1,000 bond
with a coupon rate of 8 percent and 20 years to maturity. If this
bond pays interest annually, what is the value of this bond to an
investor who requires an 8 percent rate of return?
- A. $607.72
- B. $692.00
- C. $1,000
- D. cannot be determined from the information given
- What is the value of an Orion bond that has a 10 percent
coupon, pays interest annually, and has 10 years to maturity, if
the required rate of return is 12 percent?
- A. $1,200
- B. $885.50
- C. $895.27
- D. $735.26
What is the market value of a $1,000 zero-coupon bond with 5
years to maturity. The market rate today is 9 percent.
- A. $593
- B. $650
- C. $621
- D. $495