A zero-coupon bond matures in 10 years and will be worth $1000.00 to the holder. If the bond was purchased 10 years ago, and yielded a return of 5% per year, how much did the holder pay for the bond? (Assume annual compounding, and answer to the nearest cent-$0.01).
Q: At the beginning of the year, you bought a $1,000 par value corporate bond with a 6 percent annual…
A: par = $1000 coupon rate = 6% n= 10 year r=8%
Q: Suppose you bought a five-year zero-coupon Treasury bond for $800 per $1000 face value. Assuming…
A: Data given for zero coupon bond: FV= $1000 P=$ 800 Yield on comparable bond= 7% Holding period…
Q: what is the bond's yield to maturity?
A: Call price = Par value + call premium = $1000 + $1000*10% = $1100
Q: What is the present value.if $5,400 is discounted back 4 years at an interest rate of 3% compounded…
A: Dear student, as per Bartleby answering guidelines we can answer only the first question if the…
Q: You purchased an annual-interest coupon bond one year ago with six years remaining to maturity at…
A: Coupon Interest Rate = 10% Face value = $1000 Coupon Amount =1000*10% = 100 Years = 6 years Yield…
Q: Consider a bond with a face value of $1,000. The coupon is paid semiannually and the market interest…
A: 1. ANNUAL COMPOUNDING YEARS 10 COUPON RATE 6.00% PMT (COUPON AMOUNT) $60 INTEREST RATE…
Q: Suppose you bought a five-year zero-coupon Treasury bond for $800 per $1000 face value. Assume the…
A: Holding Period Return Bond financial backers are not committed to take a guarantor's bond and hold…
Q: BEST Company bonds are yielding 12% and will mature in 10 years from now. The coupon rate is 14% and…
A: bond yield is nothing but the return that investor realises on the bond.the relation between the…
Q: You own a bond that has a par value of $1,000 and matures in 5 years. It pays a 5 percent annual…
A: This question require us to calculate the bond's expected rate of return.
Q: Assume a $1,000 face value bond has a coupon rate of 8 percent, pays interest semi-annually, and has…
A: GIVEN, par = $1000 coupon rate = 8% t = 8 n =2 ( semi annual coupon bond) r = 10% A= face value x…
Q: A BobCo bond with a face value of $100 matures in one year. There is a 50% chance that BobCo will go…
A: To find the market interest rate, we will first have to find the expected value to be received. We…
Q: Suppose that Ford issues a coupon bonds at a price of $1,000, which is the same as the bond's par…
A: In the given question we required to tell the payment investor would receive every year except last…
Q: If you purchase a 5-year, zero-coupon bond for $691.72, how much could it be sold for 3 years later…
A: Zero coupon bonds are bonds which do not pay coupons and sold at discount to face value
Q: If the current price of a 10-year 4.5% coupon bond which pays semiannually is $96.10, what is its…
A: Here, Face value (FV) = $100 Coupon rate = 4.5% semiannually Coupon payments (PMT) = (4.5% of 100)/2…
Q: An investor is considering a discount bond that promises a payment of $14,400 in two years. If…
A: Bonds are issued by the company to meet the financial requirements of the company without losing its…
Q: What is the purchase price for a bond that is paying 6 percent annual coupon rate in Semi-annual…
A: Annual coupon rate- The coupon rate is the yearly earnings a shareholder can expect to receive while…
Q: $1,000 bond has a coupon of 8 percent and matures after twelve years. Assume that the bond pays…
A: The price of the bond is what the investors are currently willing to pay for the bond. Yield to…
Q: A $1,000 bond has a 7.5 percent coupon and mature after ten years. If a current interest rates are…
A: a.Calculation of Price of Bond if the Interest Rate is 10%:The bond price can be calculated using a…
Q: You buy a 30-year zero coupon bond with a face value of $1000 and a 3% interest rate, compounded…
A: Given information : Time period of bond (years) 30 Face value $1,000 Interest rate 3%…
Q: A callable bond with £100 face value and 15 years maturity, has been issued at par with a coupon…
A: Face Value £ 100.00 Time Period 15 Coupon Rate 10%…
Q: A $1,000 bond has a coupon of 5 percent and matures after twelve years. Assume that the bond pays…
A: The price of the bond is the present value of the bond's cash flows. The current yield is the coupon…
Q: A 15 years bond with annual coupon rate equal to 10% (paid semiannually), if the par value of the…
A: A bond is considered as a fixed-income instrument. A bond represents the loan provided by the…
Q: A $1,000 bond has a coupon of 8 percent and matures after ten years. Assume that the bond pays…
A: Thank you for posting questions. Since you have posted multiple questions, as per the guideline I am…
Q: The Garcia Company’s bonds have a face value of $1,000, will mature in 10 years, and carry a coupon…
A: The present value of bond can be calculated as present value of coupon payments and present value of…
Q: You purchased a bond for 1,100. The bond has a coupon rate of 9 percent, which is paid semiannually.…
A: Given: Current price = 1,100 Coupon rate = 9% Years = 17 Par value = 1,000
Q: Company B has a bond outstanding that pays a 8% coupon. The interest is paid semi-annually, and the…
A: Current yield can be calculated by dividing the coupon amount with current selling price of bond.…
Q: A bond with a par value of P5,000 and with a bond rate of 9% payable annually is sold now for…
A: Yield to maturity is the rate at which current market value is equal to the present value of cash…
Q: A bond with a face value of $5,000 pays interest of 8% per year. This bond will be redeemed at par…
A: Information Provided: Face value = $5000 Coupon rate = 8% Term = 20 years Yield = 10%
Q: A $1,000 bond has a 7.5 percent coupon and matures after ten years. If current interest rates are…
A: Hi, since there are multiple sub-parts, I will answer the first 3, as per guidelines. Please repost…
Q: XYZ issued a bond with a par value of P1,000. The bond pays an interest of P35 each quarter, and has…
A: We need to calculate the price of bond which will be sum of the present value of all coupon payment…
Q: Suppose you purchased a corporate bond with a 10-year maturity, a $1,000 par value, a 10% coupon…
A: Given: Particular Value Par Value 1000 Time to maturity 14 Coupon rate 10%
Q: 4) A zero-coupon bond matures in 10 years and will be worth $1000.00 to the holder. If the bond was…
A: Given data; price of bond = $1000 yield to maturity = 5% number of years to maturity when bond is…
Q: Assume the coupon rate is 10% issue at par $1000 and for 15 years. Let say the market interest rate…
A: Bonds are instrument issued by company acknowledging the debt raised by company . It is a liability…
Q: A $1,000 bond has a coupon of 4 percent and matures after tên years. ASsume that the bond pays…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: suppose you bought a 5- year-zero coupon Treasury bond for $800 per $1000 face value. Assume the…
A: Fist we need to calculate the yield of the bond that is: r=(face value/treasury bond…
Q: Madsen Motors's bonds have 11 years remaining to maturity. Interest is paid annually, they have a…
A: Time Period = 11 years Par Value = 1000 Coupon = Coupon Rate× Par Value = 9% × 1000 = 90 YTM = 11%
Q: Consider a bond with a face value of $1,000. The coupon is paid semiannually and the market interest…
A: Using PV function of excel
Q: Suppose the investor sells his bonds before maturity and uses some of the proceeds to purchase a…
A: After the interest has been compounded, the Effective Annual Rate (EAR) is the rate of interest…
Q: BEST Company bonds are yielding 12% and will mature in 10 years from now. The coupon rate is 14%…
A: Price of the bond = Coupon Amount * PVAF ( Semi annual rate, Number of periods ) + face value * PVIF…
Q: Madsen Motors's bonds have 10 years remaining to maturity. Interest is paid annually, they have a…
A: It is the discounted value of future cash stream generated by a bond. It is the sum of present value…
Q: A $1,000 bond has a coupon of 8 percent and matures after eight years. Assume that the bond pays…
A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…
Q: You will receive $60 interest every six months from your investment in a corporate bond. The bond…
A: a) What is the present value of the bond in the absence of inflation if the market interest rate is…
Q: A $1,000 bond has a coupon of 6 percent and matures after ten years. What would be the bond’s price…
A: The question is based on the concept of Valuation of bonds
Q: f a bond can be purchased for $60 and has a maturity value at the end of 10 years of $500, what is…
A: Bonds: Bonds are the liabilities of the company which is issued to raise the funds required to…
Q: Suppose you have an investment horizon of 10 years and bought a 20-year maturity, 8% coupon bond at…
A: Total return on a callable bond Total return is calculated using cash inflows and outflows as shown…
A zero-coupon bond matures in 10 years and will be worth $1000.00 to the holder. |
|
|
|
|
If the bond was purchased 10 years ago, and yielded a return of 5% per year, how much |
|
|
|
|
did the holder pay for the bond? (Assume annual compounding, and answer to the |
|
|
|
|
nearest cent-$0.01). |
|
|
|
|
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- Suppose you purchase a 10-year bond with 6% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.01% when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per $100 face value? b. What is the internal rate of return of your investment? Note: Assume annual compounding. The cash flow at time 1-3 is $ (Round to the nearest cent. Enter a cash outflow as a negative number.) (Round to the nearest cent. Enter a cash outflow as a negative number.) The cash outflow at time 0 is $ The total cash flow at time 4 (after the fourth coupon) is $ negative number.) b. What is the internal rate of return of your investment? (Round to the nearest cent. Enter a cash outflow as aSuppose you purchase a ten-year bond with 12% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 10.64% when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per $100 face value? b. What is the internal rate of return of your investment? Note: Assume annual compounding. a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flow at time 1-3 is $ (Round to the nearest cent. Enter a cash outflow as a negative number.) The cash outflow at time 0 is $ number.) (Round to the nearest cent. Enter a cash outflow as a negative The total cash flow at time 4 (after the fourth coupon) is $. (Round to the nearest cent. Enter a cash outflow as a negative number.) b. What is the internal rate of return of your investment? The internal rate of return of your investment is %. (Round to two decimal…Suppose you purchase a 10-year bond with 6.3% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.6% when you purchased and sold the bond, A)What cash flows will you pay and receive from your investment in the bond per $100 face value? B)What is the annual rate of return of your investment?
- Suppose you purchase a 10-year bond with 6.1 % annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.7 % when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per $ 100 face value? b. What is the annual rate of return of your investment?Suppose you purchase a 10-year bond with 6.3% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.6% when you purchased and sold the bond, a. what cash flows will you pay and receive from your investment in the bond per $100 face value? b. what is the annual rate of return of your investment? Cash Flows - $113.39 $6.30 $6.30 $6.30 b. What is the annual rate of return of your investment? The annual rate of return of your investment is %. (Round to one decimal place.) $115.04Suppose you purchase a 10-year bond with 6.4% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 5.5% when you purchased and sold the bond, a. what cash flows will you pay and receive from your investment in the bond per $100 face value? b. what is the annual rate of return of your investment? a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flows from the investment are shown in the following timeline: (Round to the best choice below.) A. Year 0 1 2 3 4 Cash Flows $110.90 $6.40 $6.40 $6.40 $104.50 B. Year 0 1 2 3 4 Cash Flows - $106.78 $6.40 $6.40 $6.40 $110.90 C. Year 0 2 3 4 Cash Flows $104.50 $6.40 $6.40 $6.40 $110.90 OD. Year 1 2 3 Cash Flows $106.78 $6.40 $6.40 $6.40 $110.90 b. What is the annual rate of return of your investment? The annual rate of return of your investment is %. (Round to one decimal place.)
- You purchase a $10,000 bond at a discounted price of $9500. The 10-year bond pays 6% interest quarterly. If you sell the bond at maturity (10 years) for its face value, determine the rate of return for your investment. The rate of return will be the annual interest rate (not the bond interest, that is 6% quarterly) which would make the present worth equal to zero.The Garcia Company’s bonds have a face value of $1,000, will mature in 10 years, and carry a coupon rate of 17.6 percent. Assume interest payments are made semiannually. How would your answer change if the required rate of return is 11.4 percent? (Round final answer to nearest dollar amount.) Present value $Type your answer hereSuppose you purchase a 10-year bond with 6% annual coupons. You hold the bond for fouryears, and sell it immediately after receiving the fourth coupon. If the bond’s yield to maturitywas 5% when you purchased and sold the bond,a. What cash flows will you pay and receive from your investment in the bond per $100 face value?b. What is the internal rate of return of your investment?
- To secure a return of 4%, at what price should a bond be purchased if it is redeemable at P 1,000 in 10 years and plays annual dividends of P 35,00? Ans. P 959.45 You purchased a P 500 bond for P 5,100.00. The bond pays 200 per year. It is redeemable for P 5,050 after 10 years. What is the net rate of interest on your investment? Ans. 3.486%Suppose you purchase a 10-year bond with 6.64% annual coupons. You hold the bond for 4 years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 5.17% when you purchased and sold the bond, a. what cash flows will you pay and receive from your investment in the bond per $100 face value? b. what is the annual rate of return of your investment? a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flows from the investment are shown in the following timeline: (Round to the best choice below.) OA. Years Cash Flows O B. Years C. Years Cash Flows Cash Flows - $114.06 O D. Years 0 Cash Flows $107.42 0 0 - $111.26 0 $111.26 1 $6.64 1 $6.64 1 $6.64 1 $6.64 2 $6.64 2 + $6.64 2 + $6.64 2 + $6.64 3 $6.64 3 $6.64 3 $6.64 3 $6.64 b. What is the annual rate of return of your investment? The annual rate of return of your investment is %. (Round to two decimal places.) 4 $114.06 4 $107.42 4 $114.06 4…Suppose you purchase a 10-year bond with 6.19% annual coupons. You hold the bond for 4 years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 5.34% when you purchased and sold the bond, a. what cash flows will you pay and receive from your investment in the bond per $100 face value? b. what is the annual rate of return of your investment? a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flows from the investment are shown in the following timeline: (Round to the best choice below.) A. Years 2 3 Cash Flows $106.46 $6.19 $6.19 $6.19 $110.46 B. Years 0 2 3 4 Cash Flows - $106.46 $6.19 $6.19 $6.19 $110.46 C. Years 0 1 2 3 4 Cash Flows $104.27 $6.19 $6.19 $6.19 $110.46 D. Years 0 2 3 4 + $6.19 $6.19 $6.19 $104.27 Cash Flows - $110.46 b. What is the annual rate of return of your investment? The annual rate of return of your investment is %. (Round to two decimal places.)
![EBK CONTEMPORARY FINANCIAL MANAGEMENT](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)
![EBK CONTEMPORARY FINANCIAL MANAGEMENT](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)