5. A corporate bond has a yield of 6.5 percent and a coupon of 4.25 percent. The bond matures in 8 years and sells for $1,475. Interest is paid semiannually. What is the unusual feature of the bond? Hint: solve for the missing variable. 6. A corporate bond has a yield of 5.78 percent, paid semiannually, with a par value of $1,000. The bond matures in 8 years and sells for $. What is the coupon rate for the bond? 7. If the following bonds are identical except for coupon, what is the price of bond B7? The bonds pay interest semiannually Solve for the missing variable for Bond A and use that to find the price of Bond B. Bond A $1,000 $95 24 $957 Face value Annual coupon Years to maturity Price Bond B $1,000 $85 24 ??

5. A corporate bond has a yield of 6.5 percent and a coupon of 4.25 percent. The bond matures in 8 years and sells for $1,475. Interest is paid semiannually. What is the unusual feature of the bond? Hint: solve for the missing variable. 6. A corporate bond has a yield of 5.78 percent, paid semiannually, with a par value of $1,000. The bond matures in 8 years and sells for $. What is the coupon rate for the bond? 7. If the following bonds are identical except for coupon, what is the price of bond B7? The bonds pay interest semiannually Solve for the missing variable for Bond A and use that to find the price of Bond B. Bond A $1,000 $95 24 $957 Face value Annual coupon Years to maturity Price Bond B $1,000 $85 24 ??

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

A $1,000 bond has a coupon of 4 percent and matures after tên years. ASsume that the bond pays interest annually. a. What would be the bond's price if comparable debt yields 6 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $ b. What would be the price if comparable debt yields 6 percent and the bond matures after five years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. c. Why are the prices different in a and b? The price of the bond in a is -Select- v than the price of the bond in b as the principal payment of the bond in a is -Select- v than the principal payment of the bond in b (in time). d. What are the current yields and the yields to maturity in a and b? Round your answers to two decimal places. The bond matures after ten years: CY: % YTM: % The bond matures after five years: CY: YTM:
2. A bond matures in 10 years. The bond's face value is $1,000 and pays an annual 7.5% coupon interest rate. The current price of the bond is $1,125. The bond begins to be callable in 5 years at a call price of $1,050. What is the yield to call?
A corporate bond has 23 years to maturity, a face value of $1,000, a coupon rate of 5.5%, and pays interest semiannually. The annual market interest rate for similar bonds is 3.3%. Part 1 What is the value of the bond? 0+ decimals
A corporate bond pays interest twice a year and has 22 years to maturity, a face value of $1,000 and a coupon rate of 6.1%. The bond's current price is $1,463.61. It is callable starting 16 years from now (years to call) at a call price of $1,047. What is the bond's (annualized) yield to maturity?
A bond has just been issued. The bond has an annual coupon rate of 7% and coupons are paid annually. The bond has a face value of $1,000 and will mature in 7 years. The bond’s yield to maturity is 9%. Calculate the actual change in the bond’s price as the yield to maturity changes from 9% to 11%. Use the bond’s duration to calculate the approximate bond price change as the yield to maturity changes from 9% to 11%.
A $1,000 par value bond with a 7.50% coupon rate (semianual interest) matures in 7 years and currently sells for $992.66. What is the bond's yield to maturity and bond equivalent yield? The bond's yield to maturity is%. (Round to two decimal places.)
A Treasury bond has a face value of $100, a maturity of 20 years, a coupon of 4%, and pays the coupon every six months, at the end of each six month period. The price of the bond is $105. What is the yield of this bond? a. 3.65% b. 1.8% C. 1.7% d. 3.8%
A bond has just been issued. The bond has an annual coupon rate of 4% and coupons are paid annually. The bond has a face value of $1,000 and will mature in 8 years. The bond’s yield to maturity is 8%. Create a table to demonstrate the impact of the coupon rate and the time to maturity on the bond’s duration using: Coupon Rates of 0%, 4%, 8%, and 12%. Maturities of 4 years, 8 years, and 12 years.
9. A bond has a time-to-maturity of 8 years, a coupon rate of 5%, is currently selling for $1021.35. What is the bond's yield if it pays interest annually? A. 4.6740%. B. 5.6874%. C. 3.2654%. D, 4.0258%.
ELECTRON Computers just issued a bond that matures in 8 years. Its par value is equal to $1,000 and its coupon rate is equal to 7.5%. Interest payments are made annually. The yield to maturity on the bond is 7%. a. This type of bond is called: OYield bond OCoupon bond ODiscount bond b. Calculate the value of the coupon payment. Coupon payment = $ c. Calculate the value of the bond today. Use two decimal places and report a positive number. VB = $
a treasury bond that matures in 10 years has a yield of 6.75%. a 10 year corporate bond has a yield of 9.50%. assume that the liquidity premium on the corporate bond is 0.35%. What is the default risk premium on the corporate bond?
1. A RM1,000 bond matures in 10 years has a coupon rate of 8 percent. Calculate the price of this bond using the following market rate of interest and show the calculation steps: a) 3 percent. b) 5 percent. c) 7 percent.

SEE MORE QUESTIONS

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