A newly issued 20-year maturity, zero - coupon bond is issued with a yield to maturity of 9.5% and face value $1,000. Find the imputed interest income in (a) the first year; (b) the second year; and (c) the last year of the bond's life. Assume annual coupon payments.
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- A newly issued 20-year maturity, zero-coupon bond is issued with a yield to maturity of 9.0% and face value $1,000. Find the imputed interest income in (a) the first year; (b) the second year; and (c) the last year of the bond's life. Assume annual coupon payments. Note: Round your answers to 2 decimal places. First year Second year Last year Imputed InterestA 10-year bond with a face value of $1,000 has a coupon rate of 9.0%, with semiannual payments. a. What is the coupon payment for this bond? b. Enter the cash flows for the bond on a timeline. a. What is the coupon payment for this bond? The coupon payment for this bond is $ every six months. (Round to the nearest cent.)Calculate the Macaulay duration of an 8 percent, $1,000 par bond that matures in four years if the bond’s YTM is 10 percent and interest is paid semiannually. Calculate this bond’s modified duration. Assuming the bond’s YTM goes from 10 percent to 9.5 percent, calculate an estimate of the price change.
- A ten-year 100 face amount bond has an annual coupon rate of 8% payable semiannually. The bond is callable at the end of the 5th, 7th, and 9th years at par, immediately after the coupon payment. Calculate the maximum price of the bond that ensures an annual effective yield of at least 6%. (A) 108.92 (B) 111.83 (C) 114.41 (D) 115.59 (E) 116.74A newly issued 10-year maturity, 4% coupon bond making annual coupon payments is sold to the public at a price of $800. What will be an investor’s taxable income from the bond over the coming year? The bond will not be sold at the end of the year. The bond is treated as an original-issue discount bond.Assume that a 5-year bond pays interest of $110 once a year (1 payment / year) and will mature for $1,000. Also assume that the yield to maturity on this bond is currently 12 percent. Given this information, determine the duration of this bond. Answer truncated to 2 decimal places. For example, if your answer is 3.267, enter "3.26".
- The current interest rate on a 10-year coupon bond (with face value= $1000 and annual coupon rate= 3.25%) is 1.31%. The buyer of this bond will receive $_____ payment from the bond issuer every year before maturity while holding the bond.Consider a 1000 par value 3-year bond with (semi-annual) coupons at 8.4% con- vertible semiannually, which will be redeemed at 1050. The bond is bought to yield 10% convertible semiannually. Construct the amortization schedule for this bond. ) Compute the flat price, accrued coupon, and market price 8 months after purchase of the bond described in the previous item. Use all three methods.Consider a zero-coupon debt with a face value of $1,000 issued on December 31, 2040. The bondhas three years to maturity and a yield to maturity of 5%.Required: Compute the price of the zero-coupon debt as of December 31, 2040 and find interestexpenses and the balance of the debt principal to be reported at the end of each year, 2041through 2043.
- A $1,000 par value bond with a fixed 10% rate of interest pays coupons semiannually. What amount will the bondholder receive on the bond’s maturity date?A newly issued 10-year maturity, 7% coupon bond making annual coupon payments is sold to the public at a price of $975. What will be an investor's taxable income from the bond over the coming year? The bond will not be sold at the end of the year. The bond is treated as an original issue discount bond.A 30-year 8% annual coupon bond with a face value of 1000 is purchased. At the time of purchase, the interest rate is 6%. After the 7th coupon payment, the interest rate rises to 10%. Calculate the difference between the book value of the bond and the market value of the bond immediately after the 7th coupon payment.