A 6.95% coupon, 9.0 -year annual bond has a yield to maturity of 3.96%. Assuming the par value is 1,000 and the YTM does not change over the next year, Compute the following: A. Price of the bond today: B. Price of the bond in one year: C. Capital gains yield (please answer as a percentage with 2 decimal places): D. Current Yield (please answer as a percentage with 2 decimal places):

A 6.95% coupon, 9.0 -year annual bond has a yield to maturity of 3.96%. Assuming the par value is 1,000 and the YTM does not change over the next year, Compute the following: A. Price of the bond today: B. Price of the bond in one year: C. Capital gains yield (please answer as a percentage with 2 decimal places): D. Current Yield (please answer as a percentage with 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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A firm's bonds have a maturity of 10 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 5 years at $1,054.36, and currently sell at a price of $1,104.71. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: % YTC: % What return should investors expect to earn on these bonds? Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC.
Calculate the current yield on the described bond. A $500 Treasury bond with a coupon rate of 3.2% that has a market value of $425 The current yield is %. (Round to two decimal places as needed.)
Rolling Company bonds have a coupon rate of 5,00 percent, 19 years to maturity, and a current price of $1,136. What is the YTM? The current yield? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. YTM Current yield
Find the duration of a 6% coupon bond making annual coupon payments if it has three years until maturity and a yield to maturity of 7.9%. What is the duration if the yield to maturity is 11.9%? (Do not round intermediate calculations. Round your answers to 4 decimal places.) YTM 7.9% YTM 11.9% YTM Duration
Rolling Company bonds have a coupon rate of 6.20 percent, 25 years to maturity, and a current price of $1,196. What is the YTM? The current yield? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) YTM % Current yield %
A bond paying a coupon of 7% is redeemable in five years at nominal value ($100) and is currently trading at $106.62. Estimate its yield (required rate of return).
What is the coupon rate for a bond with 3 years until maturity, a price of $1,053.46, and a yield to maturity of 7%? Interest is paid annually. FV= Par Value = $1,000 9.04% O 8% O 7.9% O 8.5%
Calculate the annual interest (in $) and current yield (as a %) of the bond. (Round your percentage to one decimal place.) Company Coupon Rate Annual Interest Company 5 8.25% +A Market Price 104.00 Current Yield %
Last year Carson Industries issued a 10-year, 15% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,075 and it sells for $1,180. What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: YTC What is the current yield? What is the expected capital gains (or loss) yield for the coming year? Use amounts calculated in above requirements for calculation, if required. Negative value should be indicated by a minus sign. Round your answer to two decimal places.
A firm's bonds have a maturity of 8 years with a $1,000 face value, have an 8% semlannual coupon, are callable in 4 years at $1,048.54, and currently sell at a price of $1,094.91. What are their nominal yield to maturity and their nominal yield to call? Do not round Intermediate calculations. Round your answers to two decimal places. YTM: YTC: What return should investors expect to earn on these bonds? I. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. II. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. III. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM. IV. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM. -Select-
Compute the yield to maturity for a zero coupon bond with a maturity of 13 years and a face value of $1000. The bond is selling for $546.60. (Assume annual discounting.) (Round to 100th of a percent and enter as a percentage, e.g. 12.34% as 12.34)
A corporate bond with annual coupons has a duration of 4.9 years and a yield to maturity of 11%. What is the relative change in the bond's price if yields increase by 10 basis points? Enter your answer with the percentage sign or as a decimal number.

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