You have just purchased a 17-year, $1,000 par value bond. The annual coupon rate on this bond is 10.9 percent paid each 6 months.
You have just purchased a 17-year, $1,000 par value bond. The
annual coupon rate on this bond is 10.9 percent paid each 6 months.
If you expected to earn the market rate of 14.9 as return on this
bond, how much did you pay for it?
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.
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%
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%....
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...
You purchased a bond with a par value of $1,000 and a coupon
rate of 8 percent at a price of $1,100 at the beginning of the
year. The price of the bond was $1,000 at the end of the year.
Which of the following development(s) could explain this
change?
1. The default risk of the bond increased.
2. The YTM of bonds of similar credit risk increased.
3. The YTM of bonds of similar credit risk decreased.
4. The...
1)
a. Consider a $1,000 par value bond with a 6% coupon rate paid
semiannually, and has 9 years to maturity. What is the price of the
bond if it is priced to yield 7%?
b. Cutler Co. issued 11-year bonds a year ago at a
coupon rate of 7.8 percent. The bonds make semiannual payments. If
the YTM on these bonds is 8.6 percent, what is the current bond
price?
c. A $1000 bond with a coupon rate of 6.2%...
Consider an annual-pay bond with a $1,000 par value and a 7
percent coupon rate, three years remaining to maturity, and a 9
percent yield to maturity. The duration of this bond is closest to:
Group of answer choices 2.8 years 2.63 years 2.5 years
You purchase a 20-year, $1,000 par value 6% coupon bond with
annual payments with a yield to maturity of 8%. 1 year later after
receiving a coupon payment, the yield to maturity has decreased to
7% and you sell the bond. What is your total rate of return on the
investment over the year?
A 6 percent coupon bond that has a $1,000 par value, semiannual
coupon payments and a yield to maturity of 5.25 percent. The bond
matures in 9 years.
What is the price of the bond, What will happen to the price if
market interest rates rise to 6.45 percent, what can you say about
the relationship between the price of a bond and the market
interest rate?