Find 11-month interest rate if the price of 5% bond maturing in
5 month is $99...
Find 11-month interest rate if the price of 5% bond maturing in
5 month is $99 and the price of 8% bond maturing in 11 month is
$101. All bonds have $100 face value and pay semi-annual
coupons.
Find the value of a bond maturing in 4 years, with a $1 comma 000 par value and a coupon interest rate of 11% ?(5.5% paid semiannually) if the required return on similar-risk bonds is 16% annual interest left parenthesis 8 % paid semiannually).
Find the value of a bond maturing in 11 years, with a $1,000
par value and a coupon interest rate of 12% (6% paid
semiannually) if the required return on similar-risk bonds is 17%
annual interest (8.5% paid semiannually).
3. Find the price of a corporate bond maturing in 5 yearsthat has a 5 percent coupon (annual payments), a $1,000face value, and an AA rating. A local newspaper’s financialsection reports that the yields on 5‐year bonds are AAA,6 percent; AA, 7 percent; and A, 8 percent.
4. What is the yield‐to‐maturity of a corporate bond witha 3‐year maturity, 5 percent coupon (semiannual payments),and $1,000 face value if the bond sold for $978.30?
11)Answer based on the following: Interest rate on U.S. assets =
5%, interest rate on European assets = 12%, the spot rate of
exchange = 0.90 Euros/$, the one year forward rate of exchange =
0.95 EUROS/$. The European citizen should hold which asset?
1)
The Euro asset
2)
The Dollar asset
12)If real interest rates in Canada are above those in the Euro
area,
1)
The Euro area is likely to see an appreciation of its
currency.
2)
There...
If the market rate of interest is 10%, a $9500, 11%, 10-year
bond that pays interest annually would sell at an amount
less than face value.
equal to face value.
greater than face value.
that cannot be determined.
Bond T is a coupon bond with a coupon rate of 2% maturing in 3
years. The bond pays coupon annually, and has a face value of
$100.15. What is the Macaulay duration of the coupon bond
a) If the interest rate decreases, how will it impact the market
price of a bond?
b) Do long-term bonds have higher price risk than short-term
bonds?
Please illustrate your point by comparing the price change of
two bonds of 1yr and 10yr maturity respectively due to interest
rate changes. Assume both bonds have $1000 par and $100 annual
coupon payment. show work