Homework #4F (Bond Yield to Call. YTM and Price after original Issue)

Question 1. Duration and Banking Consider a 5-year bond with annual coupon payments. The bond has a face value (prin- cipal) of $100 and sells for $95. Its coupon rate is 3%. (The coupon rate is the ratio between the coupon value and the face value). The face value is paid at the maturity year in addition to the last coupon payment. 1. Calculate the bond's yield to maturity (YTM) and duration using its YTM. 2. Suppose the bond's YTM changes in the same way as a 5-year T-bill interest rate. Use the bond's modified duration to evaluate the relative change in the 5-year bond's value if the interest rate on 5-year T-bills falls by one basis point, that is, by 0.0001. This part was extracted from the balance sheet of the First Bank of Australia: Assets (Billion AUD) Bond 80 Liabilities (Billion AUD) Fixed-rate liabilities 60 where "Bond" here refers to the bond we specified above and the fixed-rate liabilities (banks future payment obligations) have an average duration of 4 years and YTM of…

the following features: • Coupon rate of interest (paid annually): 10 percent • Principal: $1,000 • Term to maturity: 8 years a. What will the holder receive when the bond matures? |-Select- b. If the current rate of interest on comparable debt is 7 percent, what should be the price of this bond? Assume that the bond pays interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. Would you expect the firm to call this bond? Why? -Select- v, since the bond is selling for a-Select- v. c. If the bond has a sinking fund that requires the firm to set aside annually with a trustee sufficient funds to retire the entire issue at maturity, how much must the firm remit each year for eight years if the funds earn 7 percent annually and there is $80 million outstanding? Use Appendix C to answer the question. Round your answer to the nearest dollar.

What is the value of a bond that has a par value of $1,000, a coupon of $120 (annually), and matures in 10 years? Assume a required rate of return of .0702. Instruction: Type your answer in dollars, and round to two decimal places.

Give typing answer with explanation and conclusion  A 3-month zero-coupon bond is selling for $99.7 and a 10-year zero-coupon bond is selling for $55.7. Both bonds have a face value of $100. What's the 10-year - 3-month spread in their yields? Answer in percent, rounded to one decimal place.

Consider the market rates for the maturities 1, 2, and 3 years respectively in the table below. What is the price of a 3-year bond with annual payments, coupon rate equal to 9.50% and face value equal to $68,000. Answer with two decimal digits accuracy. Example: 74929.05 t 1 2 3 R(0,t) 1.95 2.90 4.40 Blank Excel Worksheet Your Answer: Answer

Suppose that you buy a two-year 8.9% bond at its face value.   a-1. What will be your total nominal return over the two years if inflation is 3.9% in the first year and 5.9% in the second? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)           a-2. What will be your total real return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)           b. Now suppose that the bond is a TIPS. What will be your total 2-year real and nominal returns? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Suppose that you buy a two-year 7.3% bond at its face value. a-1. What will be your total nominal return over the two years if inflation is 2.3% in the first year and 4.3% in the second? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Nominal return a-2. What will be your real return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Real return % % Real return Nominal return b. Now suppose that the bond is a TIPS. What will be your total 2-year real and nominal returns? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) 1%

Given the following information on a bond, Par value: $1000 Interest rate: 6% Coupon rate: 8% paid semiannually Years to maturity: 15 years, what is the expected price at the end of year 5? Question 7Select one: a. 1145.32 b. 1152.98 c. 1148.77 d. 1141.97 please show math and explanation..

K Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): 0 2 5 Period $19.53 a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value? Cash Flows View an example Get more help. ★ a. What is the maturity of the bond (in years)? The maturity is years. (Round to the nearest integer.) A 6 1 MacBook Pro & 7 $19.53 * 8 9 C 59 $19.53 60 $19.53+$1,000 Clear all BUB 0 {

What is the last payment amount of a bond with 1 payment per years, Coupon Rate 8.50% and principal and $514,000 principal and matures in 10 years? Answer with two decimal digits accuracy. Example: 631062.50

Give typing answer with explanation and conclusion  A 3.90 percent coupon municipal bond has 11 years left to maturity and has a price quote of 97.45. The bond can be called in four years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and a par value of $5,000.)   a. Compute the bond’s current yield.   b. Compute the yield to maturity.   c. Compute the taxable equivalent yield (for an investor in the 36 percent marginal tax bracket)   d. Compute the yield to call.

Can someone help me pls. Thank you!

What is the approximate price of a bond that matures in two years (T= 2), with a face value of $1000 (F= $1000), and an annual coupon payment of $50 (C = $50), if the interest rate is 6 percent? $1056.67 $1100.00 $876.33 $981.67

Consider a bond with a current value of   $928.01. It is a 10​-year, $1,000 ​bond, coupons paid​ semi-annually, and has a 7% coupon rate. a. The​ bond's yield to maturity​ (YTM) is: b. What will be its value​ (per $1,000 of​ face) if its YTM changes to 10%​?       Question content area bottom Part 1 a. The YTM is enter your response here​%. ​(Round to two decimal​ places.)   b. Value​ (per $1,000 of​ face): ​$enter your response here. ​(Round to the nearest​ cent.)

Please don’t reject question , question is complete please answer answer all four parts. Thx

Consider a bond (with par value = $1,000) paying a coupon rate of 10% per year semiannually when the market interest rate is only 4% per half-year. The bond has three years until maturity. Required: a. Find the bond's price today and six months from now after the next coupon is paid. b. What is the total (6-month) rate of return on the bond? Complete this question by entering your answers in the tabs below. Required A Required B Find the bond's price today and six months from now after the next coupon is paid. Note: Round your answers to 2 decimal places. Current price Price after six months $ $ 1,052.42 1,044.52

Give typing answer with explanation and conclusion

1. Consider a real return bond with a face value of $15,000 and a coupon yield of 5.2%. What is the coupon payment after one year if the inflation rate is 6.8%? Select one: a) $817.44 b) $833.04 c) $825.24 d) $809.64 I

A bond that matures in 10 years has a ​$1,000 par value. The annual coupon interest rate is 8 percent and the​ market's required yield to maturity on a​ comparable-risk bond is 13 percent. What would be the value of this bond if it paid interest​ annually? What would be the value of this bond if it paid interest​ semiannually?       Question content area bottom Part 1 a.  The value of this bond if it paid interest annually would be ​$enter your response here.

Please show working   Please answer ALL OF QUESTIONS 1 AND 2   1. A bond has a $1,000 par value, 10 years to maturity, and an 8% annual coupon and sells for $980. a. What is its yield to maturity (YTM)? Round your answer to two decimal places. ___________%    b. Assume that the yield to maturity remains constant for the next 3 years. What will the price be 3 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.____________% 2. Assume that the risk-free rate is 6% and the required return on the market is 8%. What is the required rate of return on a stock with a beta of 1.5? Round your answer to two decimal places.

1. A three-year bond with a $1,000 face-value and 10% coupon rate is sold for $1,000 today (Year 1).  If one year later (Year 2) the market interest rate decreases by 5%, then this bond will have a market price of $ ____ (round UP to the nearest integer) next year (Year 2).   2. True or False? The current interest rate on a 10-year coupon bond with face value = $1,000 and annual coupon rate = 3.25% is2.42%.  This implies the buyer of the bond will receive a $24.2 payment from the bond issuer every year before maturity while holding the bond.   3. A three-year bond with $1,000 face-value and 10% coupon rate is sold for $1,000 today (YEAR 1).  If one year later (Year 2) the market interest rate increases by 5%, then this bond will have a market price of $ ________ (round UP to the nearest integer) then (Year 2).