A year ago, you purchased a 5-year bond, paying fixed annual coupons at a rate 5%pa....

A year ago, you purchased a 5-year bond, paying fixed annual coupons at a rate 5%pa. At the time you purchased the bond, the yield to maturity was 5%pa. If you sold the bond after receiving the first interest payment and the bond's yield to maturity had changed to 4%, your annual total rate of return on holding the bond for that year would have been approximately ________. Group of answer choices

8.1% 4.8% 8.6% 7.6% 9.5% PreviousNext

Expert Solution

jeff jeffy answered 2 years ago

a) What is the price of a 10-year bond paying semi-annual coupons at the rate of...

a) What is the price of a 10-year bond paying semi-annual coupons at the rate of 5% compounded semi- annually, if it is priced to yield 4.8% compounded semi-annually? b) Is the bond trading at a premium or at a discount? c) What would be the price quote for this bond? d) What is the Macaulay duration of this bond in years, rounded to 2 decimal places? (Hint: create a table in excel) e) What is the price of a...

1) Compute the Macaulay duration for a 5-year bond paying annual coupons of 9% and having...

1) Compute the Macaulay duration for a 5-year bond paying annual coupons of 9% and having a yield to maturity of 9.5%. a. 3.86 Answers: a. 3.86 b. 4.57 c. 5.00 d. 3.78 e. 4.23 2) Which of the following bonds would be cheapest to deliver given a T-note futures price of 90.4697? (Assume that all bonds have semiannual coupon payments based on a par value of $100.) Answers: a. 9.5-year bond with 4.5% coupons and a yield of 3.5%...

Suppose a ten-year bond $1,000 bond with a 5% coupon rate that pays annual coupons is...

Suppose a ten-year bond $1,000 bond with a 5% coupon rate that pays annual coupons is initially trading at par (at $1,000). After 5 years time, the bond’s yield to maturity falls to 4%. If you sell the bond after 5 years, what price will you receive

Suppose, three years ago, you purchased a 15-year coupon bond paying 5% interest annually with a...

Suppose, three years ago, you purchased a 15-year coupon bond paying 5% interest annually with a face value of $1000. It is now three years later and you just received an interest payment yesterday (the bond matures in exactly twelve years). You look in the paper and the yield on comparable debt is 6%. If you bought it at Par value, did you have a capital gain or loss? Also, if the yield decreased to 4.5%, would you have a...

You own a 10-year bond paying an annual coupon rate of 5%. The yield to maturity...

You own a 10-year bond paying an annual coupon rate of 5%. The yield to maturity on the bond is 7%. The face value, as usual, is $1000. What is the value of the bond today?

RCL issues a 7-year fixed coupon bond paying coupons semi annually at a coupon rate of 7.50%.

RCL issues a 7-year fixed coupon bond paying coupons semi annually at a coupon rate of 7.50%. The bonds current price as a percentage of par is $92.0185 and its future value is $1000.a. What is the bonds YTM ?b. What is the bonds Duration?

A 30-year bond is purchased at a discount. The bond pays annual coupons. The amount for...

A 30-year bond is purchased at a discount. The bond pays annual coupons. The amount for accumulation of discount in the 15th coupon is 147. The amount for accumulation of discount in the 19th coupon is 200. Calculate the amount of discount in the purchase price of this bond

Problem B, MaGAP Inc issued a Floating Rate Bond, paying semi-annual coupons at the rate of...

Problem B, MaGAP Inc issued a Floating Rate Bond, paying semi-annual coupons at the rate of (ic/2) = [ref rate + 120 BPs]/2. The face value of the bond is $1000 and the current reference rate is 10.8%. The remaining time to maturity is 8 years (16 coupons) and the current market price of the bonds is P = $905.53. Currently, each coupon is expected to pay ($) a. 108 b. 120 c. 60 d. 54 The YTM (based on...

1.What is the price of a 20-year bond paying 7 % annual coupons with a face...

1.What is the price of a 20-year bond paying 7 % annual coupons with a face (par) value of $1,000 if an 20-year bond making semi-annual payments and paying 7 % sells at par? Answer to the nearest cent, xxx.xx and enter without the dollar sign. 2.Suppose the interest rate on a 1-year T-bond is 6.3 % and that on a 3 year T-bond is 7.3 %. Assuming the pure expectations theory is correct, what is the market's forecast for...

What is the price of a 12-year bond paying 8.2% annual coupons with a face (par)...

What is the price of a 12-year bond paying 8.2% annual coupons with a face (par) value of $1,000 if the market rates for these bonds are 5.7%? Answer to the nearest cent, xxx.xx What is the price of a zero-coupon 6-year maturity bond per face (par) value of $1,000 if the annual market rates for these bonds are 12.1%? Answer to the nearest cent, xxx.xx

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