An investor with an investment horizon of 1.4 year(s) purchases a 5% coupon bond with 2 years to maturity and a face value of $100. The bond is trading at a yield of 7%. Coupons are paid semi-annually. What is this investor's duration gap? Assume semi-annual compounding. Round your answer to 4 decimal places
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An investor with an investment horizon of 1.4 year(s) purchases a 5% coupon bond with 2 years to maturity and a face value of $100. The bond is trading at a yield of 7%. Coupons are paid semi-annually. What is this investor's duration gap?
Assume semi-annual compounding. Round your answer to 4 decimal places.
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- Calculate the Macaulay Duration for a six-year annual coupon paying bond with a coupon of 3.5 %, priced with a yield to maturity of 5.5%. Assume that you are calculating 10 days after a coupon payment where day count convention is 360 days. (Work to 4 decimal places and then present your answer to 2 decimal places).What is the Macaulay duration in years of a 3% coupon bond with 2 years to maturity and a face value of $100? Assume the bond is trading at a yield of 7%, and that coupons are paid semi-annually. Assume semi-annual compounding. Round your answer to 2 decimal places.Consider a bond (with par value = $1,000) paying a coupon rate of 10% per year semiannually when the market interest rate is only 4% per half-year. The bond has three years until maturity. Required: a. Find the bond's price today and six months from now after the next coupon is paid. b. What is the total (6-month) rate of return on the bond? Complete this question by entering your answers in the tabs below. Required A Required B Find the bond's price today and six months from now after the next coupon is paid. Note: Round your answers to 2 decimal places. Current price Price after six months $ $ 1,052.42 1,044.52
- Suppose 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 5.3% when you purchased and sold the bond, what is the annual rate of return of your investment? (Round to 2 decimal places)What is the value of a bond that has a par value of $1,000, a coupon of $120 (annually), and matures in 10 years? Assume a required rate of return of .0702. Instruction: Type your answer in dollars, and round to two decimal places.You purchase a KD 3000 face value bond with 5 years remaining in its maturity period. The bond has current yield of 15% and its payment are KD 45 made every month. If compounding is annually, calculate the following: 1. The purchase value of the bond. 2. The yield to maturity. (Show trial and error with interpolation)
- What is the value of a bond that matures in 17 years, makes an annual coupon payment of $50, and has a par value of $1,000? Assume a required rate of return of .0590. Instruction: Type your answer in dollars, and round to two decimal placesSuppose 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 aYou are given a ten-year bond which is redeemed at par. The bond pays 6% annual coupons and an effective annual rate of interest equal to 7%. Calculate the Macaulay duration.
- An investor has two bonds in his portfolio that have a face value of $1,000 and pay an 11% annual coupon. Bond L matures in 17 years, while Bond S matures in 1 year. Assume that only one more interest payment is to be made on Bond S at its maturity and that 17 more payments are to be made on Bond L. What will the value of the Bond L be if the going interest rate is 5%? Round your answer to the nearest cent.An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 7% annual coupon. Bond L matures in 14 years, while Bond S matures in 1 year. Assume that only one more interest payment is to be made on Bond S at its maturity and that 14 more payments are to be made on Bond L. What will the value of the Bond L be if the going interest rate is 4%? Round your answer to the nearest cent.$ What will the value of the Bond S be if the going interest rate is 4%? Round your answer to the nearest cent.$ What will the value of the Bond L be if the going interest rate is 10%? Round your answer to the nearest cent.$ What will the value of the Bond S be if the going interest rate is 10%? Round your answer to the nearest cent.$ What will the value of the Bond L be if the going interest rate is 12%? Round your answer to the nearest cent.$ What will the value of the Bond S be if the going interest rate is 12%? Round your answer to the nearest cent.$Suppose that a 5-year 6% bond is purchased between the issuance date and the first coupon date. The days between the settlement date and the next coupon period is 60. There are 90 days in the coupon period given that the coupons are paid quarterly. Suppose the discount rate is 4%. What is the dirty price, clean price, and accrued interest?