6 8 49 | (22) 5:01 1 A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 6 years from now? Do not round your intermediate calculations. a. $859.14 O b. $1,000.69 O c. $918.74 d. $931.43 e. $965.26

6 8 49 | (22) 5:01 1 A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 6 years from now? Do not round your intermediate calculations. a. $859.14 O b. $1,000.69 O c. $918.74 d. $931.43 e. $965.26

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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QUESTION 3 The market price of a bond is $1,119.90; it has 4 years to maturity, a $1,000 par value, and pays a coupon of $100 every year. What is the yield to maturity? (assume the coupons are paid annually). A. 3.27% B. 6.50% C. 6.54% D. 10.00% E. None of the above
Q24 A bond OMR 100 face value, 10 years to maturity, 4% annual coupon rate, and a annual required rate of return of 8%. What is the coupon payment amount of the Bond; assume that coupons are compounded monthly? a. OMR 2.000 b. OMR 1.000 c. OMR 0.333 d. OMR 4.000
Problem 6-16 Bond Returns (LO2, 3) A bond has 10 years until maturity, a coupon rate of 8.6%, and sells for $1,140. Interest is paid annually. (Assume a face value of $1,000.) a. If the bond has a yield to maturity of 9.4% 1 year from now, what will its price be at that time? Note: Do not round intermediate calculations. Round your answer to nearest whole number. Price b. What will be the rate of return on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign. Rate of return % c. If the inflation rate during the year is 3%, what is the real rate of return on the bond?
F What must be the price of a $2,000 bond with a 5.9% coupon rate, annual coupons, and 25 years to maturity if YTM is 10.2% APR? A. $984.98 B. $1,231.23 OC. $1,723.72 D. $1,477 47 CODE
Question 8 How much will the coupon payments be of a 10-year $1,000 bond with a 7% coupon rate and quarterly payments. $5.83 O $35 O $17.50 O $70.00
Problem 6-16 Bond Returns (LO2, 3) A bond has 10 years until maturity, a coupon rate of 9%, and sells for $1,100. Interest is paid annually. (Assume a face value of $1,000.) If the bond has a yield to maturity of 9% 1 year from now, what will its price be at that time? Note: Do not round intermediate calculations. What will be the rate of return on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign. If the inflation rate during the year is 3%, what is the real rate of return on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.
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
QUESTION 6 A. B. Matur ity (year s) 1 D. 2 3 $114.51 $113.45 $112.508 Spot rate (%) $120.54 1.25 1.50 19 2-years from now 1.908 Using the spot rates, what would be the value of an option-free bond that pays 6% annual coupon? Par value is $100. 1-year Forward rate (%) 1.70 491 0-years from now 1.25 1-year from now 1.75 Cash flow $3 $3 $103
QUESTION 1 Coupon Payment is calculated: O a. Adding Coupon Rate with Face value O b. It is the Coupon Rate only O c. Dividing Coupon Rate upon Face value O d. Multiplying Coupon Rate with Face value
Question 6 Assume that a bond makes 10 equal annual payments of \$1,000$1,000 starting one year from today. The bond will make an additional payment of \$100,000$100,000 at the end of the last year, year 10. (This security is sometimes referred to as a coupon bond.) If the discount rate is 3.5\%3.5% per annum, what is the current price of the bond?
Q21 A bond coupon rate of 9%. It matures after 8 years. It has a current market price of OMR 96. Assume that coupons are semi-annual payments. What is annual coupon payment amount of the Bond? a. OMR 8.64 b. OMR 4.32 c. OMR 4.5 d. OMR 9
Question 5 0/1 Oscorp has just issued its Norman Special Long Bond. The bonds have a maturity of 25 years, a coupon rate of 0.50% and pay the coupon on a semi-annual basis. The face value of the bond is $1000. The bonds are trading at a YTM of 5.00%. What is the current yield of these? (Enter your answer as a % accurate to two decimal points. DO NOT add a % symbol or any extraneous punctuation.)

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