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A $1,000 bond has a coupon of 5 percent and matures after twelve years. Assume that the bond pays interest annually. What would be the bond's price if comparable debt yields 8 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $   What would be the price if comparable debt yields 8 percent and the bond matures after six years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $   Why are the prices different in a and b? The price of the bond in a is  than the price of the bond in b as the principal payment of the bond in a is  than the principal payment of the bond in b (in time). What are the current yields and the yields to maturity in a and b? Round your answers to two decimal places. The bond matures after twelve years: CY:   % YTM:   % The bond matures after six years: CY:   %

A $1,000 bond has a coupon of 5 percent and matures after twelve years. Assume that the bond pays interest annually. What would be the bond's price if comparable debt yields 8 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $   What would be the price if comparable debt yields 8 percent and the bond matures after six years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $   Why are the prices different in a and b? The price of the bond in a is  than the price of the bond in b as the principal payment of the bond in a is  than the principal payment of the bond in b (in time). What are the current yields and the yields to maturity in a and b? Round your answers to two decimal places. The bond matures after twelve years: CY:   % YTM:   % The bond matures after six years: CY:   %

Essentials Of Investments
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
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A $1,000 bond has a coupon of 5 percent and matures after twelve years. Assume that the bond pays interest annually.

  1. What would be the bond's price if comparable debt yields 8 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.

    $  

  2. What would be the price if comparable debt yields 8 percent and the bond matures after six years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.

    $  

  3. Why are the prices different in a and b?
    The price of the bond in a is  than the price of the bond in b as the principal payment of the bond in a is  than the principal payment of the bond in b (in time).

  4. What are the current yields and the yields to maturity in a and b? Round your answers to two decimal places.

    The bond matures after twelve years:

    CY:   %
    YTM:   %

    The bond matures after six years:

    CY:   %
    YTM:   %
 
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