A $6,500,000 issue of a 30-year bond, redeemable at par, offers 9.50% coupons payable semi-annually. The bond yields 4.50% compounded monthly. a. What was the purchase price of the bond, if it was purchased 25 years before maturity? Round to the nearest cent b. What was the amount of discount or premium on the bond? (click to select) amount is

A $6,500,000 issue of a 30-year bond, redeemable at par, offers 9.50% coupons payable semi-annually. The bond yields 4.50% compounded monthly. a. What was the purchase price of the bond, if it was purchased 25 years before maturity? Round to the nearest cent b. What was the amount of discount or premium on the bond? (click to select) amount is

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 coupon bond that pays semiannual interest is reported in the Wall Street Journal as having an ask price of 93% of its $1,000 par value. If the last interest payment was made 55 days ago, and this interest period has 183 days, and the coupon rate is 4.25%, what is the invoice price of the bond? Enter your answer to to 2 decimal places.
A corporate bond has 23 years to maturity, a face value of $1,000, a coupon rate of 5.5%, and pays interest semiannually. The annual market interest rate for similar bonds is 3.3%. Part 1 What is the value of the bond? 0+ decimals
Find the interest payment for the following bond (par value for each is $1,000, semi-annual payments): a zero-coupon bond maturing in 10 years? (format answer as $1,234.56 there are zero cents such as $1,234.00)
on Assume that you purchase a 30-year stripped bond with a $100,000 face value. The current bond price is $9,937.73 and the yield is 8%. Calculate the interest revenue during the first year of holding the bond. Calculate amounts to nearest dollar, no $. Answer:
A 9 year bond with maturity value of $4300.02 and a yield rate of 4.9% was sold 18 months before maturity. If the seller earned 6% on the bond over the time that it was held, then for how much did they sell it? Give your answer rounded to the nearest cent
A 10-year bond, with a par value equaling $1,000, pays 7% annually. If similar bonds are currently yielding 6% annually, what is the market value of the bond? Use semi-annual analysis. PRESENT YOUR ANSWER ROUNDED WITH ZERO DECIMAL PLACES Respuesta:
a. An 8 ½%, 25-year, $1,000 bond is presently selling at a yield-to-maturity (YTM) of 9 4%. Assuming annual interest payments, what should you pay for the bond? b. What should you pay if interest is paid semiannually? c. Instead of a 25-year bond, they decide to issue 15-year bonds with annual payments. What should you pay for this bond if the YTM is 9 4%? Explain the differences in prices changes for (3a) and (3c) in terms of maturity. d. You buy an 8%, 15-year, $1,000 bond that pays interest annually when it is selling with a YTM of 7%. Immediately after you buy the bond, the YTM increases to 9%. What was the percentage change in the price of the bond? A bond has a market price that exceeds its face value. What type of bond is this? Describe the relationship between the coupon rate and the YTM. е.

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