1. You own 2 bonds (A & B), each with a par value of $1,000. Bond A pays 8% interest annually; bond B accrues 8% annual interest until maturity. Assume a constant 10% market rate for all years to complete the schedule below. INPUT AREA Interest payment -Bond A Interest payment -Bond B Maturity value Market rate Years to maturity PV annuity @ 10% PV 1 @ 10% OUTPUT AREA YEARS TO MATURITY 123 BOND A 2 BOND B 3 VALUE

1. You own 2 bonds (A & B), each with a par value of $1,000. Bond A pays 8% interest annually; bond B accrues 8% annual interest until maturity. Assume a constant 10% market rate for all years to complete the schedule below. INPUT AREA Interest payment -Bond A Interest payment -Bond B Maturity value Market rate Years to maturity PV annuity @ 10% PV 1 @ 10% OUTPUT AREA YEARS TO MATURITY 123 BOND A 2 BOND B 3 VALUE

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Intro A corporate bond has 23 years to maturity, a face value of $1,000, a coupon rate of 5% and pays coupon twice a year. The annual market interest rate for similar bonds is 3%. Part 1 What is the price of the bond (in $)? 0+ decimals Submit Attempt 1/3 for 10 pts.
Boxer Corp is issuing $600,000 8% 5 year bonds when bond investors want a return of 10%. Interest is payable semiannually Caculate Present Value of Bond Calculate Present Value of Interest Payments What is selling price of bond? did the bond sell at face value discount or premium?
9
QUESTION 1 UMass Boston issued bonds to pay for the construction of the residencce halls. One of their bond issues pays a coupon of $43.76 twice a year. What is the coupon rate? Answer as a percent. QUESTION 2 What is the coupon rate for the bond? Assume semi-annual payments. Answer as a percent! Coupon Rate Bond City of Somerville ? Yield 4.4% Price $990.90 t 18
Ef 420.
Use the following tables to calculate the present value of a $608,000 @ 6%, 6-year bond that pays $36,480 interest annually, if the market rate of interest is 7%. Round to the nearest dollar. Present Value of $1 ¦ Present Value of Annuity of $1 Periods 5 % 6 % 7 % 10 % ¦ Periods 5 % 6 % 7 % 10 % 1 .95238 .94340 .93458 .90909 ¦ 1 .95238 .94340 .93458 .90909 2 .90703 .89000 .87344 .82645 ¦ 2 1.85941 1.83339 1.80802 1.73554 3 .86384 .83962 .81630 .75131 ¦ 3 2.72325 2.67301 2.62432 2.48685 4 .82270 .79209 .76290 .68301 ¦ 4 3.54595 3.46511 3.38721 3.16987 5 .78353 .74726 .71299 .62092 ¦ 5 4.32948 4.21236 4.10020 3.79079 6 .74622 .70496 .66634 .56447 ¦ 6 5.07569 4.91732 4.76654 4.35526 7 .71068 .66506 .62275 .51316 ¦ 7 5.78637 5.58238 5.38929 4.86842 8 .67684 .62741 .58201 .46651 ¦ 8 6.46321…
(Related to Checkpoint 9.2) (Yield to maturity) Abner Corporation's bonds mature in 17 years and pay 8 percent interest annually. If you purchase the bonds for $825, what is your yield to maturity? Question content area bottom Part 1 Your yield to maturity on the Abner bonds is enter your response here%. (Round to two decimal places.)
Intro Lomack Company's bonds have a 8-year maturity, a 9% coupon, paid semiannually, and a par value of $1,000. The market interest rate is 4%, with semiannual compounding. Part 1 What is the bond's value (in $)? 0+ decimals Submit
Bond A: 10 Year annual bond, price $1010, coupon rate 6%, par $1000 Bond B: 10 year semi-annual bond, price $1010, coupon rate 6%, par $1000 Does Bond A have a higher cost of debt than Bond B?
wo 30-year maturity mortgage-backed bonds are issued. The first bond has a par value of $10,000 and promises to pay a 7.5 percent annual coupon, while the second is a zero coupon bond that promises to pay $10,000 (par) after 30 years, with interest accruing at 7.0 percent. At issue, bond market investors require a 9.0 percent interest rate on both bonds. Required: a. What is the initial price on each bond? b. Now assume that both bonds promise interest at 7.5 percent, compounded semiannually. What will be the initial price for each bond? c. If market interest rates fall to 6.5 percent at the end of the fifth year, what will be the value of each bond, assuming annual payments as in (a) (state both as a percentage of par value and actual dollar value)?
4) A 10 year bond with $50, 000 face value has semiannual coupon rate 4% and semiannual yield rate 2%. Fill out the following amortization table. Principle Outstanding t Payment Interest герaid Balance 1 2 3 12
A 20-year Amazon bond pays 9% interest annually on a $ 1,000 par value. If the bond currently sells for $ 945, what is the bond's yield to maturity? a. 9.63% b. 9.00% c. 10.63% d. 20%

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