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30.00 A coupon bond pays this amount every 6 months; for the number of payments/year; 2 2$ The bond also pays at maturity the par (face) value; Number of years until maturity The required return of holders of this bond is; What is the PV of the CFs, or what would be the fair price to purchase this bond? 1,000.00 15 8.00% If the required return of holders of this bond is; 6.00% What is the PV of the CFs, or what would be the fair price to purchase this bond? Ifthe required return of holders of this bond is; 4.00% What is the PV of the CFs, or what would be the fair price to purchas to purchase this bond? If the previous bond sells for; $ (976.00) What must be the yield to maturity for this bond (aka IRR) ? (to nearest b.p.)

30.00 A coupon bond pays this amount every 6 months; for the number of payments/year; 2 2$ The bond also pays at maturity the par (face) value; Number of years until maturity The required return of holders of this bond is; What is the PV of the CFs, or what would be the fair price to purchase this bond? 1,000.00 15 8.00% If the required return of holders of this bond is; 6.00% What is the PV of the CFs, or what would be the fair price to purchase this bond? Ifthe required return of holders of this bond is; 4.00% What is the PV of the CFs, or what would be the fair price to purchas to purchase this bond? If the previous bond sells for; $ (976.00) What must be the yield to maturity for this bond (aka IRR) ? (to nearest b.p.)

Essentials Of Investments
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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**Bond Valuation and Yield Analysis** A coupon bond provides the following details: - **Coupon Payment Frequency**: Every 6 months. - **Coupon Payment Amount**: $30.00. - **Number of Payments per Year**: 2. - **Par (Face) Value of the Bond**: $1,000.00. - **Number of Years Until Maturity**: 15 years. ### Required Return Scenarios 1. **Scenario a**: - **Required Return**: 8.00% - **Question**: What is the Present Value (PV) of the Cash Flows (CFs), or what would be the fair price to purchase this bond? - **Answer**: [Blank Space] 2. **Scenario b**: - **Required Return**: 6.00% - **Question**: What is the PV of the CFs, or what would be the fair price to purchase this bond? - **Answer**: [Blank Space] 3. **Scenario c**: - **Required Return**: 4.00% - **Question**: What is the PV of the CFs, or what would be the fair price to purchase this bond? - **Answer**: [Blank Space] ### Yield to Maturity (YTM) Analysis - **Given**: The bond sells for $976.00. - **Question**: What must be the yield to maturity for this bond (also known as the Internal Rate of Return, IRR)? (to nearest basis point) - **Answer**: [Blank Space]
Transcribed Image Text:**Bond Valuation and Yield Analysis** A coupon bond provides the following details: - **Coupon Payment Frequency**: Every 6 months. - **Coupon Payment Amount**: $30.00. - **Number of Payments per Year**: 2. - **Par (Face) Value of the Bond**: $1,000.00. - **Number of Years Until Maturity**: 15 years. ### Required Return Scenarios 1. **Scenario a**: - **Required Return**: 8.00% - **Question**: What is the Present Value (PV) of the Cash Flows (CFs), or what would be the fair price to purchase this bond? - **Answer**: [Blank Space] 2. **Scenario b**: - **Required Return**: 6.00% - **Question**: What is the PV of the CFs, or what would be the fair price to purchase this bond? - **Answer**: [Blank Space] 3. **Scenario c**: - **Required Return**: 4.00% - **Question**: What is the PV of the CFs, or what would be the fair price to purchase this bond? - **Answer**: [Blank Space] ### Yield to Maturity (YTM) Analysis - **Given**: The bond sells for $976.00. - **Question**: What must be the yield to maturity for this bond (also known as the Internal Rate of Return, IRR)? (to nearest basis point) - **Answer**: [Blank Space]
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