An 8% $200,000 bond has exactly 9 years to maturity and pays semi-annually. What is the price of the bond if the yield is 6.84%pa? Give your answer correct to 2 decimal places, with no need for the dollar ($) sign.

An 8% $200,000 bond has exactly 9 years to maturity and pays semi-annually. What is the price of the bond if the yield is 6.84%pa? Give your answer correct to 2 decimal places, with no need for the dollar ($) sign.

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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Question

An 8% $200,000 bond has exactly 9 years to maturity and
pays semi-annually. What is the price of the bond if the yield
is 6.84%pa?
Give your answer correct to 2 decimal places, with no need
for the dollar ($) sign.

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Related to Checkpoint 9.2) (Yield to maturity) The market price is $850 for a 12-year bond ($1,000 par value) that pays 11 percent annual interest, but makes interest payments on a semiannual basis (5.5 percent semiannually). What is the bond's yield to maturity? Question content area bottom Part 1 The bond's yield to maturity is enter your response here%. (Round to two decimal places.)
(Related to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 7 percent interest annually and have 9 years until maturity. You can purchase the bond for $885. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 10 percent? a. The yield to maturity on the Saleemi bonds is %. (Round to two decimal places.)
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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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