Question

In: Economics

For a ten-year 20% coupon bond with a face value of $10,000, the annual coupon payment...

  1. For a ten-year 20% coupon bond with a face value of $10,000, the annual coupon payment is
    1. $100
    2. $200
    3. $1,000
    4. $2,000

Solutions

Expert Solution

The value of the annual coupon payment is $2000.

I have explained the concept of bond coupon rate and shown below -


Related Solutions

Consider a(n) Ten-year, 12.5 percent annual coupon bond with a face value of $1,000. The bond...
Consider a(n) Ten-year, 12.5 percent annual coupon bond with a face value of $1,000. The bond is trading at a rate of 9.5 percent. a. What is the price of the bond? b. If the rate of interest increases 1 percent, what will be the bond’s new price? c. Using your answers to parts (a) and (b), what is the percentage change in the bond’s price as a result of the 1 percent increase in interest rates? (Negative value should...
Consider a 4-year, 5% annual coupon bond with a face value of $10,000, which was issued...
Consider a 4-year, 5% annual coupon bond with a face value of $10,000, which was issued three years ago. The bond just paid the coupon. Therefore, this bond has one year to maturity, and the next payment of the face and coupon will be made in exactly one year, after which the bond will cease to exist. If the bond defaults before next year, it will pay total of $8,000 in one year. The effective 1-year risk-free rate is 3.55%....
. A 20-year, $1,000 par value bond has a 7% annual payment coupon. The bond currently...
. A 20-year, $1,000 par value bond has a 7% annual payment coupon. The bond currently sells for $780. If the yield to maturity remains at the current rate, what will the price be 10 years from now?
3. A 20-year maturity coupon bond with face value of $1,000 makes annual coupon payments and...
3. A 20-year maturity coupon bond with face value of $1,000 makes annual coupon payments and has a coupon rate of 20%. When the bond sells at 1500, the YTM is____; When the bond sells at 1000, the YTM is _____; When the bond sells at 800, the YTM is _____.
A 20-year, $1,000 par value bond has a 6.4% annual payment coupon. The bond currently sells...
A 20-year, $1,000 par value bond has a 6.4% annual payment coupon. The bond currently sells for $1,080. If the yield to maturity remains at its current rate, what will the price be 4 years from now? A 7 percent corporate bond that pays interest semi-annually was issued last year. Which two of the following most likely apply to this bond today if the current yield-to-maturity is 6 percent? I. a structure as an interest-only loan II. a current yield...
A 20-year, $1,000 par value bond has 9.5% annual payment coupon. The bond currently sells for...
A 20-year, $1,000 par value bond has 9.5% annual payment coupon. The bond currently sells for $905. If the yield to maturity remains at its current rate, what will the price be 5 years from now?   (Answer to the nearest cent, xxx.xx and enter without the dollar sign )
Analyze the 20-year, 8% coupon rate (annual payment), $1,000 par value bond. The bond currently sells...
Analyze the 20-year, 8% coupon rate (annual payment), $1,000 par value bond. The bond currently sells for $1,318. What’s the bond’s current yield, and capital gain yield? 6.07%, 0.71% 6.07%, -0.71% 8%, 1.43% 8%, -1.43%
Calculate the price of a 10 percent coupon (annual coupons, $1,000 face value 20-year bond if...
Calculate the price of a 10 percent coupon (annual coupons, $1,000 face value 20-year bond if the appropriate discount rate is 3 percent. Show your return if you hold this bond for three years and discount rates don’t change. Calculate the price of a zero coupon, $1,000 face value, 5-year bond if the appropriate annual discount rate is 12 percent. Calculate your total return if you hold this bond for three years and the discount rate does not change.
Consider a bond with a $1000 face value, with a 20 year maturity and a coupon...
Consider a bond with a $1000 face value, with a 20 year maturity and a coupon rate of 8% which pays coupons with a semi-annual frequency. The 4th coupon payment will be received in 1 second. Calculate   the value of the bond if the YTM is 4%, 6%, 8%, and 10% (APR with semi-annual compounding). Explain why there is a negative relation between bond price and YTM.
A bond with a face value of $1000 will pay it's next semi-annual $50 coupon payment...
A bond with a face value of $1000 will pay it's next semi-annual $50 coupon payment in exactly 6-months. What is the price of the bond if it matures in 6 years and the required yield-to-maturity is 14% APR compounded semi-annually?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT