8. (10 Percent) Consider a corporate bond with a $1,000 face value, 10% coupon with semiannual coupon payments, 5 years until maturity, currently selling for a cash price of $1,113.80. The next coupon payment will be made in 63 days and there are 182 days in the current coupon period. What is the clean price for this bond?

8. (10 Percent) Consider a corporate bond with a $1,000 face value, 10% coupon with semiannual coupon payments, 5 years until maturity, currently selling for a cash price of $1,113.80. The next coupon payment will be made in 63 days and there are 182 days in the current coupon period. What is the clean price for this bond?

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

Suppose you want to purchase a bond with a $1,000 par value maturing in 10 years with a 12 % annual coupon interest rate, and has market interest rate of 8%. What’s the price or value of this bond? Select one: a. $1,000 b. $1,268.4 c. $805.20 d. $851.8
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 five year P1, 000 par value bond pays a 5% annual coupon. Given a YTM of 7%, what is the price of the bond today?
1. A three-year bond with a $1,000 face-value and 10% coupon rate is sold for $1,000 today (Year 1). If one year later (Year 2) the market interest rate decreases by 5%, then this bond will have a market price of $ ____ (round UP to the nearest integer) next year (Year 2). 2. True or False? The current interest rate on a 10-year coupon bond with face value = $1,000 and annual coupon rate = 3.25% is2.42%. This implies the buyer of the bond will receive a $24.2 payment from the bond issuer every year before maturity while holding the bond. 3. A three-year bond with $1,000 face-value and 10% coupon rate is sold for $1,000 today (YEAR 1). If one year later (Year 2) the market interest rate increases by 5%, then this bond will have a market price of $ ________ (round UP to the nearest integer) then (Year 2).
you are considering the purchase of a semiannual bond with a 9% coupon rate, it is trading at $875 and matures at $ 1000 in 25 years. What is the coupon payment on this bond?.
2. A bond has a par value of $1,000, a time to maturity of 10 years, and a coupon rate of 8% with interest paid annually. If the current market price is $800, what will be the approximate capital gain yield of this bond over the next year if its yield to maturity remains unchanged?
(Related to Checkpoint 9.4) (Bond valuation) A bond that matures in 8 years has a $1,000 par value. The annual coupon interest rate is 13 percent and the market's required yield to maturity on a comparable-risk bond is 16 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually? Question content area bottom Part 1 a. The value of this bond if it paid interest annually would be $enter your response here. (Round to the nearest cent.) Part 2 b. The value of this bond if it paid interest semiannually would be $enter your response here. (Round to the nearest cent.)
H3. The face value of a bond is $1000. This bond has a coupon rate of 6% compounded semi-annually with a prevailing interest rate of 6.5% compounded semi-annually. If this is a 10-year bond, what is this bond valued at initially?
5) A 6-year 7.2% annual coupon bond is selling to yield 6.5%. The bond pays interest annually. The par value of the bond is $100. a. What is the price of the 6-year 7.2% coupon bond selling to yield 6.5%? b. What is the price of this bond one year later assuming the yield is unchanged at 6.5%? c. Suppose that one year later the yield of the bond decreases to 6.3%. What is the price change attributable to moving to maturity assuming no change in the discount rate? What is the price change attributable to a decrease in the discount rate from 6.5% to 6.3%? What is the total price change?
4. The bonds of CEPS Group sells for OMR 896.67. The yield to maturity is 11 percent and thematurity date is 10 years from today. What is the annual coupon rate of this bond if the facevalue is $1,000?
6. Suppose that you invest in a 10-year, semi-annual coupon, $1,000 par value bond when it is first issued. The coupon rate and yield to maturity are equal both 8 percent. Immediately after purchase, the annual yield to maturity for the bond falls to 7 percent. First calculate then use duration to determine the percentage gain (loss) on the sale of the bond.
8. A bond has a face value of $3000 6 years from today and pays semiannual coupons at a coupon rate of 7%. If the YTM rate is 6%, What is the price of the bond today? 9. A bond has a face value of $5000 and matures 4 years and 6 months from today. It pays semiannual coupons at a coupon rate of 5%. If the bond is selling for $4500, then what is its YTM?

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