Current yieldYield to maturityMen the moreEquivalent taxable yield%Yield to call1640A 2.90 percent coupon municipal bond has 13 years left to maturity and has a price quote of 96.55. The bond can be called in fouryears. The call premium is one year of coupon payments. (Assume interest payments are semiannual and a par value of $5,000.)Compute the bond's current yield. (Do not round intermediate calculations. Round your answer to 2 decimal places.)%%00 00 0520620012200320Compute the yield to maturity. (Do not round intermediate calculations. Round your answer to 2 decimal places.)%30 50 100 15010 2009 2010231 2032111Compute the taxable equivalent yield (for an investor in the 35 percent marginal tax bracket). (Do not round intermediatecalculations. Round your answer to 2 decimal places.)26 27 22004Compute the yield to call. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

A bond is a fixed-income security offering periodic payments to the investor at defined intervals,…

A 2.90 percent coupon municipal bond has 13 years left to maturity and has a price quote of 96.55. The bond can be called in four years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and a par value of $5,000.) Compute the bond's current yield. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current yield Compute the yield to maturity. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to maturity % Equivalent taxable yield Compute the taxable equivalent yield (for an investor in the 35 percent marginal tax bracket). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call % Compute the yield to call. (Do not round intermediate calculations. Round your answer to 2 decimal places.) % %

A 2.90 percent coupon municipal bond has 13 years left to maturity and has a price quote of 96.55. The bond can be called in four years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and a par value of $5,000.) Compute the bond's current yield. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current yield Compute the yield to maturity. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to maturity % Equivalent taxable yield Compute the taxable equivalent yield (for an investor in the 35 percent marginal tax bracket). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call % Compute the yield to call. (Do not round intermediate calculations. Round your answer to 2 decimal places.) % %

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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Consider a bond with a Par Value of $1,000. It pays a coupon of 7% and the coupon is paid monthly. It matures in 2 years. Calculate the NPV if the yield on the bond is 5% and the price of the bond is $1,100. $37.99 -$62.01 $1,037.99 None of the answers are correct
Calculate (the present value of) the amount of interest excess or interest deficiency of the following bond: Par value: $100. Coupon rate 6.8%. Yield-to-maturity 6.5 %. The term of the bond is 5 years. Assume the bond pays interest twice a year, and semi-annual compounding. Express the amount of interest excess as a positive number and the amount of interest deficiency as a negative number. Round your answer to 2 decimal places. For example, if your answer is 25.689, please write down 25.69.
A bond with a coupon rate of 8 percent sells at a yield to maturity of 7 percent. If the bond matures in 10 years, what is the Macaulay duration? Note: Do not round intermediate calculations. Round your answer to 3 decimal places.
You own a bond with a coupon rate of 6.3 percent and a yield to call of 7.2 percent. The bond currently sells for $1,105. If the bond is callable in five years, what is the call premium of the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
A bond currently sells for $1,080, which gives it a yield to maturity of 7%. Suppose that if the yield increases by 50 basis points, the price of the bond falls to $1,050. What is the duration of this bond? (Do not round intermediate calculations. Round your answer to decimal places.) Duration years
A bond has a semi-annual coupon payment of $32.4. What is the coupon RATE? Convert to a percent. Round to 2 decimal places. Include a dollar sign ($) or percent (%) as appropriate. (NOTE: the coupon RATE is given annually, yet the coupon PAYMENT is semi-annual.) Answer:
A Treasury bond with the longest maturity (30 years) has an ask price quoted at 101.9375. The coupon rate is 4.10 percent, paid semiannually. What is the yield to maturity of this bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Yield to maturity %
Calculate the fair present values of the following bonds, all of which pay interest semiannually, have a face value of $1,000, have 12 years remaining to maturity, and have a required rate of return of 11.5 percent. a. The bond has a 7.8 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g. 32.16)) b. The bond has a 9.8 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g.. 32.16)) c. The bond has a 11.5 percent coupon rate. (Do not round intermediate calculations.) a. Fair present value b. Fair present value c. Fair present value
A municipal bond with a coupon rate of 2.4 percent has a yield to maturity of 3.4 percent. Assume a face value of $5,000. If the bond has 15 years to maturity, what is the price of the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
A 4.40 percent coupon municipal bond has 16 years left to maturity and has a price quote of 105.50. The bond can be called in eight years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and a par value of $5,000.) Compute the bond’s current yield. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Compute the yield to maturity. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Compute the taxable equivalent yield (for an investor in the 35 percent marginal tax bracket). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Compute the yield to call. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
A newly issued bond pays its coupons once a year. Its coupon rate is 4.3%, its maturity is 10 years, and its yield to maturity is 7.3%. Required: I am just seeking answer to "d" and "e". a. Find the holding-period return for a one-year investment period if the bond is selling at a yield to maturity of 6.3% by the end of the year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If you sell the bond after one year when its yield is 6.3%, what taxes will you owe if the tax rate on interest income is 40% and the tax rate on capital gains income is 30%? The bond is subject to original-issue-discount (OID) tax treatment. (Do not round intermediate calculations. Round your answers to 2 decimal places.) c. What is the after-tax holding-period return on the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. Find the realized compound yield before taxes for a two-year holding period, assuming that (i) you sell the…
You buy a 20-year bond with a coupon rate of 9.6% that has a yield to maturity of 10,5% (Assume a face value of $1,000 and semiannual coupon payments) Six months later, the yield to maturity is 11,5%. What is your return over the 6 months? Note: Do not round mediate calculations. Enter your answer as a percent rounded to 2 decimal places, Negative amount should be indicated by a minus sign.

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