5 years ago, you purchased a $1,000 bond for $950. The bond coupon rate is 6% per year paid monthly, and it still has 3 more years for maturity. You just received the 60th bond return payment, and you are thinking to sell the bond. If your MARR is 1% per month, what is your minimum sale price of the bond?

5 years ago, you purchased a $1,000 bond for $950. The bond coupon rate is 6% per year paid monthly, and it still has 3 more years for maturity. You just received the 60th bond return payment, and you are thinking to sell the bond. If your MARR is 1% per month, what is your minimum sale price of the bond?

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

Fifteen years ago your grandfather purchased for you a 30-year $1,000 bond with a coupon rate of 10 percent. You now wish to sell the bond and read that yields are 8 percent. What price should you receive for the 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.
You purchased a coupon bond that had a maturity of 20 years. The annual coupon interest rate was 10% paid annually, and the par value was $1,000. At the time you purchased the bond, the yield to maturity on the bond was 9%. You sold the bond one year later after receiving the first interest payment. The yield to maturity was 10% when you sold the bond. Calculate the purchase price of the bond. Calculate the selling price of the bond that you received one year later. Calculate the rate of return for the one-year holding period.
You purchased an annual-interest coupon bond one year ago with 7 years remaining to maturity at the time of purchase. The coupon interest rate is 10%, and par value is $1,000. At the time you purchased the bond, the yield to maturity was 9%. If you sold the bond after receiving the first interest payment and the bond's yield to maturity had changed to 8%, your annual total rate of return on holding the bond for that year would have been O 12.58% O 13.53% O4.01% O 14.64% 5.12%
You purchased a bond for 725. The bond has a coupon rate of 8 percent, which is paid semiannually. It matures in 6 years and has a par value of 1,000. What is your expected rate of return?
What is the current value of a $1,000 bond with a 6% annual coupon rate (paid annually) that matures in 5 years if the appropriate discount rate is 2%. Please round your answer to the nearest hundredth.
You purchase a 20-year bond that has a par value of $1,000 and pays an annual coupon of $100 ($50 every six months). The yield to maturity was 6.0 percent when you purchased this bond. Now, right after you purchased this bond, the yield (reinvestment rate) went up to 13.0 percent (6.5 percent every six months). Determine your realized compounded yield if you hold this bond for 10 years, then sell it, and reinvestment rates stay at 13.0 percent for the entire 10-year period. The yield-to-maturity when you sell the bond is also 13.0 percent. Enter your answer in decimal format, to four decimal places. For example, if your answer is 3.11%, enter "0.0311". Note that Canvas will delete trailing zeros, if entered.
Today you buy ten zero-coupon bonds which will mature in exactly 5 years. Each of these ten bonds has a face value of $100. The price you pay today for each of these bonds is $82. Assume a year goes by. Now there are only 4 years left before these bonds mature. You sell these bonds in the market for $75 per bond. What is the return you have realized on your investment in these bonds? -7.00% -9.26% -8.54% We do not have sufficient information about interest rates to calculate this answer. -9.33%
Jimmy has a bond with a $1,000 face value and a coupon rate of 8.25% paid semiannually. It has a five-year life. If investors are willing to accept a 12 percent rate of return on bonds of similar quality, what is the present value or worth of this bond? Show your work. What is the impact of paying interest semi-annually rather than annually? Explain.
You purchased an 11-year semi-annual interest coupon bond one year ago. Its coupon rate was 7%, and its par value was $1,000. At the time you purchased the bond, the yield to maturity was 6%. If you sold the bond after one year and the bond's yield to maturity had changed to 5% after one year, your annual total rate of return on holding the bond for that year would have been
Bill Magness wants to purchase ERCOT bonds which are maturing in 15 years and yielding 3.87%. These ERCOT bonds have an annual coupon rate of 4.59% and a par value of $5,000. If the ERCOT bonds pay coupons twice per year, how much will Bill Magness have to spend to purchase one ERCOT bond? Note: the next coupon will be paid in exactly 6 months. a. $5,514.90 b. $5,406.76 c. $5,677.10 d. $5,190.49 e. $5,028.29
Please provide complete step by step asnwer: You purchased an annual interest coupon bond one year ago that had six years remaining to maturity at that time. The coupon interest rate was 10%, and the par value was $1,000. At the time you purchased the bond, the yield to maturity was 8%. If you sold the bond after receiving the first interest payment and the yield to maturity continued to be 8%, your annual total rate of return on holding the bond for that year would have been A) 7.00%. B) 7.82%. C) 8.00%. D) 11.95%. E) None of the options are correct.
Suppose that you just bought a four-year $1,000 coupon bond with a coupon rate of 5.2% when the market interest rate is 5.2%. You sell the bond one year later after the market interest rate falls to 3.2%. The rate of return earned on the bond during the year was%. (Round your response to two decimal places.)

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