5. You have just purchased an outstanding 10-year bond with a par value of $1,000for $1,145.68. Its annual coupon payment is $75. What is the bond's yield tomaturity? 4. Your friend purchased an outstanding bond with a 6% annual coupon and aremaining maturity of 10 years. The bond has a par value of $1,000, and themarket rate is currently 6.75%. How much did your friend pay for the bond? Is it apar, premium, or discount bond?

A bond is a kind of debt security issued by the government and private companies to the public for…

Answered: 5. You have just purchased an…

5. You have just purchased an outstanding 10-year bond with a par value of $1,000 for $1,145.68. Its annual coupon payment is $75. What is the bond's yield to maturity?

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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Similar questions

What is the yield to maturity on a bond that has a price of $1,600 and pays $100 interest annually for 6 years at the end of which it repays the principal of $1000? Is the bond selling at premium, at par, or at discount? How can you tell?
You buy an 8.6% coupon, paid annually, 5-year maturity bond for $960. A year later, the bond price is $1,070. Face value of the bond is $1,000. a. What is the yield to maturity on the bond today? (Round your answer to 2 decimal places.) % b. What is the yield to maturity on the bond in one year? ( Round your answer to 2 decimal places.) c. What is your rate of return over the year? (Round your answer to 2 decimal places.)
1. Suppose a five-year, $ 1000 bond with annual coupons has a price of $ 898.64 and a yield to maturity of 5.5%. What is the bond's coupon rate? 2.) The yield to maturity of a $ 1000 bond with a 6.8% coupon rate, semi-annual coupons, and two years to maturity is 7.8 % APR, compounded semi-annually. What must its price be? 3.) Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): The timeline starts at Period 0 and ends at Period 30. The timeline shows a cash flow of $ 19.01 each from Period 1 to Period 29. In Period 30, the cash flow is $ 19.01 plus $ 1,000. Period 1, 2,29,30 Cash Flows: $ 19.01, $19.01, $19.01, $19.01 + $1,000 a. What is the maturity of the bond ( in years)? b. What is the coupon rate (as a percentage )? c. What is the face value?
A Treasury bond that matures in 10 years has a yield of 4.25%. A 10-year corporate bond has a yield of 9.00%. Assume that the liquidity premium on the corporate bond is 0.70%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.
What is the market value of a bond that will pay a total of 60 semi-annual coupons of $50 each over the remainder of its life? Assume the bond has a $1,000 face value and an 9% yield to maturity.
A bond that matures in one year has a $500 face value and a $60 coupon. What is the price of the bond if the interest rate is 6 percent and the bond was purchased by the present owner for $450? $103.77 $481.13 $528.30 $500.00
Consider a 5-year, semi-annual coupon bond with a price of $110 and a couponrate of 6%. The face value is $100.1. What is the yield of the bond?2. How much does the price change if the yield is increased by 0.01%.
A 15-year bond with a face value of $1,000 currently sells for $850. Which of the following statements is most correct? The bond's yield to maturity is greater than its coupon rate. If the yield to maturity stays constant until the bond matures, the bond's price will remain at $850. The bond's current yield is equal to the bond's coupon rate. The bond's yield to maturity is the same as capital gain yield. All of the statements above are correct. None of the above are correct
1. We have the opportunity to buy a 10-year (original term) bond with 7 years of semi-annual coupon payments remaining. The annual coupon rate is set at 5% ($25 semi-annual payment). If the current Yield to Maturity (prevailing market rate on comparable bonds) is approximately 6.5%, estimate the appropriate purchase price of the bond.
What is the YTM of a bond with 12 years to maturity, coupon rate of 10% paid annually, par value of $1,000, and a price of $987.25? What is the YTM of a bond with 12 years to maturity, coupon rate of 10% paid SEMIannually, par value of $1,000, and a price of $987.25?
10. A four-year bond has an 8 percent coupon rate and a face value of $1,000. If the current price of the bond is $878.31, calculate the yield to maturity of the bond (assuming annual interest payments).
What is the yield to maturity for the following bond: current price is $908, coupon rate is 11 percent, $1,000 par value, interest paid semiannually, eight years to maturity?

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