6. You want to buy a new car for $480,000, and the car dealership has quoted you an 4.6%APR loan compounded monthly for 48 months to buy the car. What is the EAR on thisloan?A. 4.66%B. 4.68%C. 4.70%D. 4.72%7. Grand Land Limited offers a 9.5% coupon bond with annual payments. The yield tomaturity is 11.2% and the maturity date is 11 years from today. What is the market price ofthis bond if the face value is $1,000?A. $895.43B. $1,009.67C. $1,112.20D. $1,234.188. How much are you willing to pay for one share of ABC stock if the company just paid a$0.70 annual dividend, the dividends increase by 1.6% annually, and you require a 10%rate of return?A. $8.29B. $8.33C. $8.47D. $8.539. A project has an initial cost of $6,500,000. The cash inflows are $900,000, $2,200,000,$3,600,000, and $4,100,000 over the next four years, respectively. What is the paybackperiod?А. 1.73 yearsВ. 2.51 уearsС. 2.94 yearsD. 3.51 years10. Suppose a stock had an initial price of $80 per share, paid a dividend of $1.35 per shareduring the year, and had an ending share price of $87. What was the capital gains yield?A. 7.55%В. 7.69%C. 8.05%D. 8.75%**

Answer 6: Effective annual interest rate =(1+Raten)^n-1 where Rate = nominal interest rate n=number…

6. You want to buy a new car for $480,000, and the car dealership has quoted you an 4.69 APR loan compounded monthly for 48 months to buy the car. What is the EAR on thi loan? A. 4.66% B. 4.68% C. 4.70% D. 4.72% 7. Grand Land Limited offers a 9.5% coupon bond with annual payments. The yield t maturity is 11.2% and the maturity date is 11 years from today. What is the market price o this bond if the face value is $1,000?

6. You want to buy a new car for $480,000, and the car dealership has quoted you an 4.69 APR loan compounded monthly for 48 months to buy the car. What is the EAR on thi loan? A. 4.66% B. 4.68% C. 4.70% D. 4.72% 7. Grand Land Limited offers a 9.5% coupon bond with annual payments. The yield t maturity is 11.2% and the maturity date is 11 years from today. What is the market price o this bond if the face value is $1,000?

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. you are offered to buy a 4 year coupon bond in the beginning of its 7th month on its third year for $963.94. its face value is $1,000 and its coupon rate is 5.172% per annum, with coupon paid at the end of each quarter . government bond rate now is 6.9%. a. is $963.94 a good price for you to buy it or not ? what is the fair price for the bond ? b. what is the yield if you buy at the price that you have been offered ? c. if the government bond rate suddenly goes down to 4.7%, what will be the fair value of the bond ? B. the company just paid $1.48 annual dividend and announce the plns to pay $1.54 next year . the dividend growthrate is expected to remain constant at the current level for the following 4 years and then settle at 3% per year , if you are planning to buy this stock in 2 years time, how much would you expect to pay for it if the required rate of return is 7% at the time of your purchase ? ( use two deciaml rounding )
Suppose Federal National Mortgage Association sells mortgage-backed securities (MBS) backed by a fixed-rate mortgage portfolio having the following features: Current mortgage balance = $300,000,000 Weighted average coupon rate (WAC) = 6% Weighted average maturity (WAM) = 360 months Current prepayment speed = 300 PSA Pass-through rate (PT Rate) = 5.4% What is the total amount of mortgage payment by mortgage loan borrowers in Month 1? O a. $1,797,749.77 O b. $1,798,651.58 OC. $298,651.58 O d. $1,500.000
2. You paid $5,000 to buy a Canadian Tire bond with a face value (maturity value) of $ 5,000 that matures in 30 years and has a coupon rate of 4% payable semi -annually. (a) Calculate t he semi -annual coupon payment. ANSWER: You sell the bond in 7 years, when the interest rate on similar bonds is j 2 = 5.4% . (b) How many coupons (payments) are left? ANSWER: (c) How much is your expected gain or loss on the sale of the bond? B/E P/Y C/Y N I/Y PV PMT FV
A ten-year floating-rate note (FRN) has coupons referenced to 3-month pound LIBOR, and pays coupon interest quarterly. Assume that the current 3-month LIBOR is 4 percent. If the risk premium above LIBOR that the issuer must pay is 12.5 basis points, the next period's coupon payment on a £1,000 face value FRN will be Group of answer choices £31.25. £82.50. £165.00. £10.31.
A Bank offers both loans and deposits at a nominal interest rate of 4% that is continuously compounded. What is the effective rate offered by the bank? The bank also offers a 3-year bond with face value £10000, redeemable at par, with 10% annual coupons. What is the final payment of that bond? Assuming there are no arbitrage opportunities, what is the price of the above bond? Give your answer to five valid digits.
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
pard annually. What is the current yield on these bonds Game of Loans Banking offers 7.5 percent coupon bonds with semiannual payments and a yield to maturity of 8.55 percent. The bonds mature in 16 years. What is the market price per bond if the face value is $1,000? 16) What 21 U
A bond paying 5% coupons semiannually and YTM of 4.5% and 12 years to maturity. If the last interest payment was made 30 days ago, assuming 364 days a year. What should the dirty price of the bond be?
4
An asset promises to pay the following: ▪ $60 each year for the next ten years: and ▪ $1,000 in ten years Assume all the cash flows are discounted by 6%. Use the annuity formula to get the price of the first part. Use the standard discounting formula to get the price of the second part. Add them together. This is a bond! It is described as paying a coupon rate of 60/1,000 = 6% (a coupon of 60), with a face value of 1,000 and a maturity of ten years. And its “yield-to-maturity” is 6%.
I need the answer as soon as possible
A Bank offers both loans and deposits at a nominal interest rate of 5% that is continuously compounded. (a) What is the effective rate offered by the bank? Give your answer to 3 digits. Do not write the % sign. For example, if your answer is 4.15% then write 4.15. Answer: (b) The bank also offers a 3-year bond with face value £10000, redeemable at par, with 10% annual coupons. What is the final payment of that bond? Do not enter the £ sign. Answer: (C) T sign. Answer: Assuming there are no arbitrage opportunities, what is the price of the above bond? Give your answer to five valid digits. Do not enter the £

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