7) Based on the following spot rates for US Corporate BBB-rated bonds, calculate the 3-year forward rates: Tenor (in years) Spot Rate 1 2 3 4 5 6 7 8 9 10 11 12 2.197% 2.258% 2.344% 2.462% 2.594% 2.734% 2.868% 2.99% 3.097% 3.2% 3.35% 3.5%

7) Based on the following spot rates for US Corporate BBB-rated bonds, calculate the 3-year forward rates: Tenor (in years) Spot Rate 1 2 3 4 5 6 7 8 9 10 11 12 2.197% 2.258% 2.344% 2.462% 2.594% 2.734% 2.868% 2.99% 3.097% 3.2% 3.35% 3.5%

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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Requirement 1. Determine the present value of 10-year bonds payable with face value of $93,000 and stated interest rate of 12%, paid semiannually. The market rate of interest is 12% at issuance. (Round intermediary calculations and final answer to the nearest whole dollar.) 1. Determine the present value of 10-year bonds payable with face value of $93,000 and stated interest rate of 12%,paid semiannually. The market rate of interest is 12%at issuance. 2. Same bonds payable as in Requirement 1, but the market interest rate is 16%. 3. Same bonds payable as in Requirement 1, but the market interest rate is 8%.
Required Information P10-10 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 [The following information applies to the questions displayed below.] On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: Interest $ 1,661 ? ? 1,640 Date January 1, Year 1 End of Year 1 End of Year 2 End of Year 3 End of Year 4 -10-10 Part 3 Cash $ 1,792 ? ? Cash received ? Amortization $ 131 ? 145 ? Balance 32,566 32,435 32,297 ? 32,000 $ . How much cash was received on the day the bonds were issued (sold)?
Ofir just issued 9.2% 12-year bonds. Find the YTM if these bonds make semiannual payments and are currently selling for 104% of par value. Specify the answer as 'X.XX%' 10.30% 4.29% 8.59% 9.45% 7.73%
bonds are queted at 101. Problem 6-8 (IAA) Sunshine Company issued 4-year P5,000,000 face value of 12% convertible bonds at 105 on January 1, 2013, maturing on January 1, 2018 and paying interest annually on December 31. It is reliably ascertained that the bonds would sell at P4,700,000 without the conversion feature with an effective yield of 14%. Eaclh P1,000 bond is convertible into 8 shares of P100 par value share capital, On December 31, 2013, all of the bonds are converted into share capital. At this time, the share has a market value of P150 and the Required: 1. Prepare journal entry to record the issuance of the bond on January 1, 2013. 2. Prepare journal entry to record the interest payment and amortization for 2013. The effective interest method of amortization is used. 3. Prepare journal entry to record the conversion of bonds on December 31, 2013.
The existing 10 year, 6% bonds are trading in the market at $900. The corporate tax rate is 32% After-tax interest rate = YTM (1-T) 2a. Calculate the interest rate for the new bonds. 2b.What is the after-tax interest rate for the new bonds?
Determine the market price of a $209,000, ten-year, 8% (pays interest semiannually) bond issue sold to yield an effective rate of 10%. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) Click here to view factor tables Market price of bond issue $
¥1 billion, 7%, 10-year bonds are issued at face value. Interest will be paid semi-annually. When calculating the market price of the bond, the present value of O ¥1 billion received in 10 periods must be calculated. O ¥70000000 received for 10 periods must be calculated. ¥35000000 received for 10 periods must be calculated. O ¥1 billion received in 20 periods must be calculated.
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