A Florida state savings bond pays $3,000 when it matures 12 years from now, but it makes no other payments. If the state bonds are to be competitive with U.S. savings bonds, which pay 11%Kinterest compounded annually, at what price will the state's bonds sell? At what price would the bond sell if U.S. savings bonds were paying 12% interest compounded annually? Compare youranswersU.S. savings bonds were paying 11% interest compounded annually, the current price, PV, of the state bond is $ (Round to the nearest cent)

Bonds refer to the instruments used by the issuing company to raise debt capital from its investors.…

A Flonda state savings bond pays $3.000 when at matures 12 years from now, but it makes no other payments if the state bonds are to be competitive with US savings bonds, which pay 11% interest compounded annually, at what price will the state's bonds sel? At what price would the bond selt US savings bonds were paying 12% interest compounded annually? Compare your answers US savings bonds were paying 11% interest compounded annually, the current price, PV, of the state bond is (Round to the nearest cent)

A Flonda state savings bond pays $3.000 when at matures 12 years from now, but it makes no other payments if the state bonds are to be competitive with US savings bonds, which pay 11% interest compounded annually, at what price will the state's bonds sel? At what price would the bond selt US savings bonds were paying 12% interest compounded annually? Compare your answers US savings bonds were paying 11% interest compounded annually, the current price, PV, of the state bond is (Round to the nearest cent)

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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P4-15 (similar to) Perpetuities The Canadian Government has once again decided to issue a consol (a bond with a never-ending interest payment and no maturity date). The bond will pay $90 in interest each year (at the end of the year), but it will never return the principal. The current discount rate for Canadian government bonds is 7%. What should this consol bond sell for in the market? What if the interest rate should fall to 6%? Rise to 8%? Why does the price go up when interest rates fall? Why does the price go down when interest rates rise? If the current discount rate for Canadian government bonds is 7%, what should this bond sell for in the market? (Round to the nearest cent.)
DIS
Suppose our corporation can borrow in EUR at 0.08% for 1 year. The current exchange rate is USD1.10/EUR, and the EUR is expected to appreciate against the dollar to USD1.2/EUR. What is the interest rate cost of the bond in USD? Please enter your answer as % -- e.g. if your answer is 2.34% type in 2.34.
Consider the following probability distribution for stocks A and B: State Probability Return on Stock A Return on Stock B 1 0.15 8 % 8 % 2 0.20 13 % 7 % 3 0.15 12 % 6 % 4 0.30 14 % 9 % 5 0.20 16 % 11 % If you invest 35% of your money in A and 65% in B, what would be your portfolio's expected rate of return and standard deviation? Please provide justification
A Treasury bill that settles on May 18, 2022, pays $100,000 on August 21, 2022. Assuming a discount rate of 5.23 percent, what are the price and bond equivalent yield? Use Excel to answer this question. Note: Round your price answer to 2 decimal places. Enter your yield answer as a percent rounded to 3 decimal places. Price Bond equivalent yield %
A US savings bond will pay you $1,000 in 3 years. If return is 2.85%, how much shoudl you pay for the bond today?
The British government has a consul bond outstanding paying £100 per year forever. Assume the current interest rate is 4% per year. What is the value of the bond immediately after a payment is made? What is the value of the bond immediately before a payment is made?
If you purchased a newly issued 10-year bond from the Icelandic government with a face value of $3,500 and a coupon payment of 7 percent, the Icelandic government would pay you A. $70 per year for 10 years plus $3,500 at the end of the 10th year. B. $245 per year for 10 years. C. $245 per year for 10 years plus $3,500 at the end of the 10th year. D. $70 per year plus 7 percent per year for 10 years.
If a 5 yr. AA- General Dynamics note is yielding a 35% tax bracket investor 7.56125% while a comparable maturity note from Philadelphia, Pennsylvania is yielding 4.8735%. If the inflation rate is 2.2765%, which bond would the investor prefer and why? If the marginal tax rate for the investor increases to 38.95%, which bond would the investor prefer? What is the critical tax rate?
An investment bank sells securities under a repurchase agreement for $800.438 million and buys them back in 7 days for $800.568 million. What is the repo's single payment yield?Report your answer in % to the nearest 0.01%;
One-year Treasury bills currently earn 5.50 percent. You expect that one year from now, one-year Treasury bill rates will increase to 5.75 percent. If the unbiased expectations theory is correct, what should the current rate be on two-year Treasury securities? 5.50% 5.625% 5.75% 11.25%
Compute how much interest a company would pay in 2023 on a 5-year, $500,000+U dollar loan (which it takes out today and has all principal due in 2028) that has an interest rate contractually set to equal 2.50% above the 1-year Treasury bond yield on June 15 each year if that specified T-bond rate turns out to be 9.23% on June 15, 2023. U=44

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