An investor buys a $1,000, 20-year 7 percent (interest paid annually) bond at par. After five years have passed, interest rates are 10 percent. How much did the investor lose on the purchase of the bond?
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An investor buys a $1,000, 20-year 7 percent (interest paid annually) bond at par. After five years have passed, interest rates are 10 percent. How much did the investor lose on the purchase of the bond?
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- An investor buys a $1,000, 20 year 6 percent (interest paid semiannually) bond at par. After five years have passed, interest rates are 11 percent. How much did the investor lose on the purchase of the bond?An investor purchases a 20-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is five percent, what is the current market value of the bond?An investor buys a bond for $10,000. The bond pays $200 interest every six months. After 18 months, the investor sells the bond for $9,500. Describe the types of income and/or loss the investor had.
- Suppose that someone owns a 30 year $14,000 T-bond with a rate of 6%. After five years the bond is sold for cash, but the interest rates have risen to 8.5%. (a)How much has the bond paid in total for the first five years? (b)How much will the bond pay the person buying it over the next 25 years? (c)How much is the bond currently worth?You purchased a $1000 10-year bond that pays $95 annually. If current interest rates are 11.25%, what is the present value of your bond?A bond with a face value of $1000 can be purchased for $800. The bond will mature 5 years from now, and the bond dividend rate is 6%. Dividends are paid every 6 months. What effective interest rate would an investor receive if she purchased the bond?
- A man purchases a bond for $900. The bond has a face value of $1,000 and pays semi-annual interest payments of $50 each. If the bond is paid in full after 10 years, what annual rate of return will the man receive?a) What is the value of a 10 year, 8.2% coupon bond with semiannual coupons.Assume the par value of the bond is $100 and it is redeemable at par. The interest rate (nominal, converted semiannually) is 10.6%. b) An investor purchased a bond that pays $5 coupons annually at the end of everyyear for five years. The purchase price was $100 and it was redeemed at par after fiveyears. If the annual effective inflation rate over the time period was 3%, calculate the realrate of return earned by the investor on this bond.An investor purchases a 10-year, $5,000 face value bond that pays semiannual interest at annual rate of 10%. If the annual market rate of interest is 8%, what is the current market value of the bond? $5,679.52 $5,405.55 $4,376.89 $5,000.00
- Suppose that someone owns a 30 year $24,000 T-bond with a rate of 4%. After 6 years the bond is sold for cash, but the interest rates have fallen to 2.5%. (a)How much has the bond paid in total for the first 6 years? (b)How much will the bond pay the person buying it over the next 24 years? (c)How much is the bond currently worth?An investor wishes to sell a 20 year, 4%, $40,000 bond that will mature in 9 years. The bond pays interest semiannually. What will be the annual ROR (nominal) and the annual ROR effective for the buyer if the bond sells for $35,500? ROR (nominal) two decimal places = ROR (effective) two decimal places =A buyer purchases a $1000 face value bond that pays a 5% coupon on January 1 and July 1st of each year. He buys the bond on February 2 for $980. What's the buyer's total outlay?