An investor invested a one-year maturity zero coupon rate bond 60 days ago by paying 965 USD from primary market. The bond is traded in the market with %3 interest rate today. If the bond's face value is $1,000 and year is accepted as a 360 days. If the investor sells the bond today, what will be his/her return from this investment.

Q: Consider a bond with a principal of $1,000 that pays a coupon of $100 per year. If the bond matures…

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A: The question is based on the concept of Financial Management.

Q: An investor invested a one-year maturity zero coupon rate bond 60 days ago by paying 965 USD from…

A: In a typical sale pruchase transaction of a bond, we need to find the return from the investment.

Q: An investor invested a one-year maturity zero coupon rate bond 60days ago by paying 965 USD from…

A: In a typical sale purchase of a zero coupon bond, we need to quantify the rate of return.

Q: In January 2008, you purchased a XYZ bond with 9 years until maturity. The bond has an annual coupon…

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Q: You buy a bond and hold it for one year. According to the information below... What is y holding…

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Q: Consider the market rates for the maturities 1, 2, and 3 years respectively in the table below. What…

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Q: Suppose a ten-year bond with a $10,000 face value pays a 5.0% annual coupon (at the end of the…

A: (C) . decrease ; increase

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A: Hi, Thanks for posting the questions. As per our Q&A guidelines, the first question should be…

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Q: Suppose that you buy a TIPS (inflation-indexed) bond with a 1-year maturity and a coupon of 2% paid…

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Q: What is the Macaulay duration of a 7 percent semiannual coupon bond with two years to maturity and a…

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Q: rate of return of the bond? W

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Q: 2. On January 1, 2022, you bought a three-year, annual-pay coupon bond with a 6% coupon rate, $1000…

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Q: A zero-coupon bond has a $100 face value, matures in 10 years and currently sells for $781.20 . a…

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Q: Required: a. Calculate the forward rate of interest for each year. b. How could you construct a…

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Q: You are interested in purchasing a bond from Swiss international. The bond had a 32 year maturity…

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Q: Suppose that for a price of $960 you purchase a 7-year Treasury bond that has a face value of $1,000…

A: Rate of Return = Coupon + Capital AppreciationTotal Investmentx100

Q: . a What is the market’s required return on this bond? b Suppose you hold this bond for one year…

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Q: A) What was your expected yield to maturity? B) What was your actual rate of return?

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Q: A bond has a face value of $25000 and pays an annual coupon rate of 5.2%. The bond is selling for…

A: The expected rate of return is calculated as coupon rate plus the capital gain yield on the bond.

Q: An investor invested a one-year maturity zero coupon rate bond 90 days ago by paying 965 USD from…

A: A zero-coupon bond is a type of bond that trades at price lower than the par value. At the maturity…

Q: B) How could you construct a 1-year forward loan beginning in year 3? (Face Value) C) How could you…

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Q: You have purchased a bond for $973.02. The bond has a coupon rate of 6.4%, pays interest annually,…

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Q: A Treasury bond with a face value of $20,000 and a coupon rate of 5% payable semiannually was bought…

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Q: Suppose that today’s date is April 15. A bond with a 7% coupon paid semiannually every January 15…

A: First we need to calculate accrued interest on bond because last interest paid on 15 January. There…

Q: What is the current yield on the bond?

A: The yield can be calculated in MS – Excel using the Yield function The Semi-annual Yield is -0.50%

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Q: Suppose you purchased a 20-year U.S. treasury bond with a 6% annual coupon ten years ago at par, but…

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Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.