A bond with a face value of $500000 and a quoted price of 102.125 has a selling price of
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Multiple Choice Question 65
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$500563. |
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$600563. |
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$510625. |
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$510063. |
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- 67 The face value of a bond with a ten-year term is $1,000. The bond has a nominal yield to maturity of 9% and offers an 8% semiannual coupon. How much does a bond cost right now? a. $908.71b. $934.96c. $935.82d. $952.37e. $960.44Bond A Bond B Bond C Face Value 1,000 1,000 1,000 Coupon Payment 75 100 115 Yield to Maturity 10% 10% 10% Maturity Period 12 12 12 Price Bond $829.66 $1,000.00 $1,102.21 Current Yield 9.04% 10.00% 10.43% Bond A is a Discount Bond, Bond B is a Par Value Bond and Bond C is a Premium Bond. The current price of Bond A is $829.66, Bond B is $1,000and Bond C is$1,102.21. The current yield of Bond A is 9.04%, Bond B is 10%and Bond C is10.43%. If the yield to maturity for each bond remains at 9%, what will be the price of each bond 2 years from now?H4
- A B D. Analysis Bond 3 Face Value Coupon Rate 5 Interest Rate (YTM) 5 Bond matures in 7 Coupons are paid annually 100,000 9.1% 10.2% 7 years 1 What is the price of the bond? O A Between 70,000 and 90,000 1 B Between 90,000 and 100,000 2 C Between 100,000 and 110,000 3 D Between 110,000 and 140,000 4 5 2 What if coupons were paid semi-annually? 6 A Between 70,000 and 90,000 7 B Between 90,000 and 100,000 8 C Between 100,000 and 110,000 9 D Between 110,000 and 140,000Question 8 Data: Face amount of bond: 10 000$ Purchase date: 7/1/89 Maturity value: 11 000$ Maturity date: 12/31/94 Coupon rate: 6% per year, compounded semiannually Coupon dates: 6/30 and 12/31 Purchaser's yield to maturity: 8% per year, compounded semiannually Question: In what range is the purchase price of the bond? А. Less than 9 400 В. 9 400, but less than 9 800 С. 9 800, but less than 10 200 D. 10 200 but less than 10 600 Е. 10 600 or more01 b Zero-Coupon Bond stsinqorqqs diw zwo1 bas anmul i want to exist of arm I own two bonds. Both have maturity values of 100 and mature in 5 years. Both have required market rates of 8%. Bond A has an annual coupon rate of 5%, and Bond Z is a soinzero-coupon bond. 29 lnu (sto ) in bi ne ai bnod sto "soing od di od la)roda Create a table showing the price of each bond each year as they approach maturity. 16llob lls br In other words, the rows will show 5, 4, 3, 2, 1, and 0 years left to maturity and the columns will have the price of Bond A and the price of Bond Z. (NOTE: For 0 years left, consider it the maturity date - after interest has been paid but before maturity value has been paid; therefore, the price with 0 years left is merely the gntuzzi aloni 1sqqol lylls maturity value which is 100.) to sub) bs What do you notice about the capital gains of the two types of bonds? Tem TY) muter
- +H 5 674910 0 B 7 valite 3) You purchased a bond from Evans Limited for $3,000. The bond has a par value of $2,500, a coupon rate of 6% and, at the time of purchase, 10 years to maturity. You hold the bond for three years and then sell it. When you sell it, interest rates for bonds like Evans are 5%. .. n At what price do you sell the bond? 5 275 2644.66 b. What annual percentage rate of return have you earned during your three-year holding period? O 300% 4) Assuming that current risk-free rates are and she market is evnerted to return 10%, what return should youD & R A1 8 - 2 Question 8. Cheapest-to-Deliver Bond Today is July 1. You hold a November Treasury bond futures contract with a price of 92:15 (i.e., 92 plus [15/32]), with a delivery date of November 15 in the same year. You have identified the two bonds below that could be used for delivery against the futures contract: Bond A Bond B Maturity 26.5 years 31 years Coupon rate 5% 8.5% Asking price 93:2 144:13 Coupon dates April 15, October 15 June 15, December 15 Callable? No No Assume that the next year is not a leap year, and that the market repo rate is 5.50%. Identify the cheapest-to-deliver bond.D & R A1 8 - 1 Question 8. Cheapest-to-Deliver Bond Today is July 1. You hold a November Treasury bond futures contract with a price of 92:15 (i.e., 92 plus [15/32]), with a delivery date of November 15 in the same year. You have identified the two bonds below that could be used for delivery against the futures contract: Bond A Bond B Maturity 26.5 years 31 years Coupon rate 5% 8.5% Asking price 93:2 144:13 Coupon dates April 15, October 15 June 15, December 15 Callable? No No Assume that the next year is not a leap year, and that the market repo rate is 5.50%. Find the conversion factors for Bond A and Bond B. Use the downloadable Excel spreadsheet on the Chicago Mercantile Exchange (CME) website: http://www.cmegroup.com/trading/interest-rates/us-treasury-futures-conversion-factor-lookup-tables.html.
- Q 20 Calculate the price of a 5.7 percent coupon bond with 22 years left to maturity and a market interest rate of 6.5 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations. Round your final answer to 2 decimal places.) BOND PRICE_______ Is this a discount or premium bond?multiple choice premium bond discount bondV5man.3
