A bond is trading today that will mature five years from now. It pays interest annually....

A bond is trading today that will mature five years from now. It pays interest annually. Its coupon rate is 5% and the par is $1,000. The yield is currently 6%. The value of the bond today is $

Solutions

Expert Solution

I HAVE EXPLAINED USING FORMULA AND ALSO EXCEL FUNCTION.

jeff jeffy answered 5 months ago

Next > < Previous

Related Solutions

jack Wong purchased a five-year bond today at $991.62. The bond pays 6.5 percent semi-annually. What...

jack Wong purchased a five-year bond today at $991.62. The bond pays 6.5 percent semi-annually. What will be the yield to maturity? a. 5.2% b. 6.7% c. 5.7% d. 6.1% e. 5.0%

A coupon bond that pays interest of $70 annually has a par value of $1000, matures in 6 years and is selling today at $50.50 discount from par value.

A coupon bond that pays interest of $70 annually has a par value of $1000, matures in 6 years and is selling today at $50.50 discount from par value. The current yield on this bond is ______?

A 5.4% coupon bearing bond pays interest semi-annually and has a maturity of 12 years. If...

A 5.4% coupon bearing bond pays interest semi-annually and has a maturity of 12 years. If the current price of the bond is $1,076.63, what is the yield to maturity of this bond? (Answer to the nearest hundredth of a percent, e.g. 12.34%)

Calculate the interest of a $1,000 bond that pays 4.25% annually with a purchase date of...

Calculate the interest of a $1,000 bond that pays 4.25% annually with a purchase date of January 1, 2012 and a maturity date of December 31, 2017.

Consider a bond that pays annual coupons and matures in 5.5 years from today when the...

Consider a bond that pays annual coupons and matures in 5.5 years from today when the last coupon is paid. The principal is $100 and the annual coupon is $10 and the yield to maturity (compounded annually with a 30/360 daycount) is 10%. Find the flat price of the bond today.

A 1,000$ par value bond with five years left to maturity pays an interest payment semiannually...

A 1,000$ par value bond with five years left to maturity pays an interest payment semiannually with a 6 percent coupon rate and is priced to have a 5 percent yield to maturity. If interest rates surprisingly increase by 0.5 percent, by how much would the bond's price change ? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Bonds price _______ by __________ ? .

A five-year bond with a yield of 11% (compounded annually) pays an 8% coupon at the...

A five-year bond with a yield of 11% (compounded annually) pays an 8% coupon at the end of each year. (a) What is the bond’s price? (b) What is the bond’s duration? (c) Use the duration to calculate the effect on the bond’s price of a 0.2% de- crease in its yield. (d) Recalculate the bond’s price on the basis of a 10.8% per annum yield and verify that the result is in agreement with your answer to (c). Face...

Consider a three-year bond trading at $110.83 that pays a 10% coupon semi-annually and has a...

Consider a three-year bond trading at $110.83 that pays a 10% coupon semi-annually and has a yield to maturity (YTM) of 6%. Calculate the duration of this bond. b)What will be the final price if the YTM increases from 6% to 7%?

Consider a three-year bond trading at $110.83 that pays a 10% coupon semi-annually and has a...

Consider a three-year bond trading at $110.83 that pays a 10% coupon semi-annually and has a yield to maturity (YTM) of 6%. a) Calculate the duration of this bond. b) What will be the final price if the YTM increases from 6% to 7%?

Consider a $1,000 par value bond with a 7% annual coupon. The bond pays interest annually....

Consider a $1,000 par value bond with a 7% annual coupon. The bond pays interest annually. There are 20 years remaining until maturity. You have expectations that in 5 years the YTM on a 15-year bond with similar risk will be 7.5%. You plan to purchase the bond now and hold it for 5 years. Your required return on this bond is 10%. How much would you be willing to pay for this bond today? Select one: a. $820 b....

Subjects