A zero-coupon bond has a yield to maturity of 5.75% and 10 years until it fully matures. What is the current price of this bond if the face value is $1,000?
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- A risk-free, zero-coupon bond with a face value of $10,000 has 14 years to maturity. If the YTM is 7.1%, which of the following would be closest to the price this bond will trade at?You find a zero coupon bond with a par value of $10,000 and 19 years to maturity. If the yield to maturity on this bond is 5.7 percent, what is the dollar price of the bond? Assume semiannual compounding periodsA risk-free, zero-coupon bond with a $1000 face value has 2 years to maturity. The yield to maturity of this bond is 2%? What is the fair price to pay for this bond?
- Suppose that a 1-year zero-coupon bond with face value $100 currently sells at $89.75, while a 2-year zero sells at $79.88. You are considering the purchase of a 2-year-maturity bond making annual coupon payments. The face value of the bond is $100, and the coupon rate is 10% per year. Required: What is the yield to maturity of the 2-year zero? What is the yield to maturity of the 2-year coupon bond? What is the forward rate for the second year? If the expectations hypothesis is accepted, what are (1) the expected price of the coupon bond at the end of the first year and (2) the expected holding-period return on the coupon bond over the first year? Will the expected rate of return be higher or lower if you accept the liquidity preference hypothesis?You find a zero coupon bond with a par value of $10,000 and 20 years to maturity. The yield to maturity on this bond is 4.2 percent. Assume semiannual compounding periods. What is the price of the bond?A bond with 5 years to maturity, a face value of $2,000 and a coupon rate of 8.0% is selling for $1750. What is its yield to maturity? If the yield changes to 8.0%, what will be the new price of the bond? (Assume annual coupon payments.)
- You are looking at a 18-year zero-coupon bond that has a yield to maturity of 5.0% . What is the value of the bond? Assume semi-annual compounding. leA 30-year maturity bond making annual coupon payments with a coupon rate of 11.00% has a ation of 13.50 years. The bond currently sells at a yield to maturity of 5.75%. Ducation a. Find the exact dollar price of the bond if its yield to maturity falls to 4.75%. What is the % change in price? b. Assume that you need to make a quick approximation using the duration rule. What is the % change in price as approximated by the duration rule when the yield to maturity falls to 4.75%? c. Does the duration-rule provide a good approximation of the % price change in this case? Why or why not?Consider a 30-year bond with a 10% coupon rate (annual payments) and a $100 face va the initial price of this bond if it has a 5% yield to maturity? If the yield to maturity is un will the price be immediately before and after the first coupon is paid?
- Consider a zero-coupon bond with a $1,000 face value and 10 years to maturity. The price this bond will trade if the Yield To Maturity is 7.1% is closest to: A) $604.35 B) $805.8 C) $705.07 D) $503.62You find a zero coupon bond with a par value of $10,000 and 13 years to maturity. If the yield to maturity on this bond is 4.7 percent, what is the price of the bond? Assume semi annual compounding periods.A 30-year maturity bond with a face value of $1,000 making annual coupon payments with a coupon rate of 12% has a duration of 11.54 years and a convexity of 192.4. The bond currently sells at a yield to maturity of 8%. a. What is the current price of this bond? b. What would be the price of the bond if the yield falls to 7%? What price (if y = 7%) would be predicted by the duration rule? d. What price would be predicted by the duration-with-convexity rule? e. What is the percent error for each rule? What do you conclude about the accuracy of the two rules? f. Repeat your analysis if the bond's yield to maturity increases to 9%. Are your conclusions about the accuracy of the two rules consistent with your answers to parts b. to e. above?