3 4 5 A. If today is March 15, 2024, what is the value of a bond with a face value of 100, an annual coupon rate of of 4% paying coupon annually maturing on March 15, 2027 with a yield to maturity of 5.8%. 6 7 Time 8 Face Value 9 Coupon rate 10 Coupon 11 Yield to Maturiy 12 Settlement Date 13 Maturity Date 14 Bond Price 15 Bond Price 16 3/15/2024 3/15/2025 3/15/2026 3/15/2027 $100 4.00% 55 $4 $4 $4 5.80% 3/15/2024 3/15/2027 -$95.17

3 4 5 A. If today is March 15, 2024, what is the value of a bond with a face value of 100, an annual coupon rate of of 4% paying coupon annually maturing on March 15, 2027 with a yield to maturity of 5.8%. 6 7 Time 8 Face Value 9 Coupon rate 10 Coupon 11 Yield to Maturiy 12 Settlement Date 13 Maturity Date 14 Bond Price 15 Bond Price 16 3/15/2024 3/15/2025 3/15/2026 3/15/2027 $100 4.00% 55 $4 $4 $4 5.80% 3/15/2024 3/15/2027 -$95.17

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

See similar textbooks

Similar questions

vidend 15. Samsung bond has been just issued under the conditions: 10 years to maturity, coupon rate 7 %, YTM 6%, semi - annual coupon payments. If it is certain that the interest rate rises to 10% next y ear (one year from today), what will be the correct bond price change? Assume the face value of the bond to be $1,000. $165 capital gain $250 capital gain $250 capital loss $285 capital loss vidend g he 15. Samsung bond has been just issued under th e conditions: 10 years to maturity, coupon rate 7 %, YTM 6%, semi-annual coupon payments. If it i s certain that the interest rate rises to 10% next y ear (one year from today), what will be the correct bond price change? Assume the face value of the bond to be $1,000. 1. $165 capital gain 2. $250 capital gain 3. $250 capital loss 4. $285 capital loss
A B D. Analysis Bond 3 Face Value Coupon Rate 5 Interest Rate (YTM) 5 Bond matures in 7 Coupons are paid annually 100,000 9.1% 10.2% 7 years 1 What is the price of the bond? O A Between 70,000 and 90,000 1 B Between 90,000 and 100,000 2 C Between 100,000 and 110,000 3 D Between 110,000 and 140,000 4 5 2 What if coupons were paid semi-annually? 6 A Between 70,000 and 90,000 7 B Between 90,000 and 100,000 8 C Between 100,000 and 110,000 9 D Between 110,000 and 140,000
18. Xcel Using a Spreadsheet to Calculate Bond Values: What is the bond quote for a $1,000 face value bond with an 8 percent coupon rate (paid semiannually) and a required return of 7.5 percent if the bond is 6.48574, 8.47148, 10.519, and 14.87875 years from maturity? (LG 6-2) Face Value 100% 100 100 100 Periodic Coupon Payment 6.48574 × 2 = 12.97148%/2 = 4% Total Payments 8.47148 x 2 = 16.94296 10.519 x 2 = 21.0380 14.87875 x 2 = 29.7575 4 4 4 Required Return 7.5% 7.5 7.5 7.5 The Bond Value Will Be 102.531% 103.094 103.594 104.437
7
Ins 8. Suppose that today's interest rate on 1-year bonds is 4% (i10 year bonds next year, in two years, and in three years are expected to be 5%, 6%, and 7%, respectively. 0.04). Interest rates on 1- ha a. According to the Expectations Theory of Term Structure, what are the equilibrium interest rates today for otherwise comparable 2-year, 3-year, and 4-year bonds? b. Draw the yield curve for that case. or
V5
man.3
Question 07 a) Consider a 20 year 7.20% annual coupon bond whose duration is approx. 11 years when required rate of return (yield to maturity) is 7.50%. Prove that this bond is immunized if you hold it for 11 years. b) Consider a 10 year 6.50% annual coupon bond whose duration is 7.50 years when required rate of return (yield to maturity) is 6.50%. Prove that this bond is immunized if you hold it for 7.50 years. Note: Do not use Ms Excel.
11 3 N Pont You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2022. The bonds have a par value of $2,000 and semiannual coupons. Company (ticker) Xenon, Incorporated (XIC) Kenny Corporation (KCC) Hilliams Company (HICO) Coupon 7.200 7.300 77 Coupon rate Maturity January 15, 2039 January 15, 2033 January 15, 2035 Last Price Last Yield. 94.399 77 94.915 ?? 6.38 7,20 Estimated S Volume (0000) 57,380 48,959 43,820 What is the coupon rate for the Williams Company bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.
Problem 6-6 Bond Yields (LO1, 2) A bond with a face value of $1,000 has 8 years until maturity, has a coupon rate of 6.0%, and sells for $1,075. a. What is the current yield on the bond? (Enter your answer as a percent rounded to 2 decimal places.) Current yield % b. What is the yield to maturity if interest is paid once a year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places.) Yield to maturity c. What is the yield to maturity if interest is paid semiannually? (Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places.) Yield to maturity
pm.8
Yogesh

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS