Assume a par value of $1,000. Caspian Sea plans to issue a 11.00 year, semi-annual pay bond that has a coupon rate of 8.11%. If the yield to maturity for the bond is 7.79%, what will the price of the bond be? Submit Answer format: Currency: Round to: 2 decimal places.

Assume a par value of $1,000. Caspian Sea plans to issue a 11.00 year, semi-annual pay bond that has a coupon rate of 8.11%. If the yield to maturity for the bond is 7.79%, what will the price of the bond be? Submit Answer format: Currency: Round to: 2 decimal places.

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter11: Bond Pricing And Amortization (bonds)

Section: Chapter Questions

Problem 8R: a. Reset the Data Section to its initial values. The price of this bond is 1,407,831. What would it...

See similar textbooks

Related questions

Q: Assume that the 3.75% US Treasury bond that matures on 15 August 2043 is priced to yield 5.14% for…

A: Given: Particulars Treasury rate 3.75% Maturity date 2043-08-15 Yield 5.14%…

Q: Consider the following coupon bond issued by XYZ.inc Term: 10 year Payment: 25 Face Value: 1,000…

A: Bonds are the debt security which is offered or issued by the corporates or the government to…

Q: Suppose a bank enters a repurchase agreerment in which it agrees to sell Treasury securities to a…

A: Sale Price = $9,99,838 Buy Back Price = $10,000,073…

Q: A Treasury bond that settles on October 18, 2019, matures on March 30, 2038. The coupon rate is 5.50…

A: Macaulay Duration: It represents the weighted average term to maturity of the bond cash flows. It…

Q: Consider a bond paying a coupon rate of 10% per year semi-annually when the market interest rate is…

A: The price of bond will be Bond price today =Present value of all coupons + present value of face…

Q: Find the duration of a bond with a settlement date of May 27, 2025, and maturity date November 15,…

A: A bond is a type of debt product in which the issuer owes the bondholder money and is required to…

Q: A 6.25 percent coupon bond with 19 years left to maturity is offered for sale at $1,095.25. What…

A: Yield to maturity (YTM) is the rate which an investor earns when the bond is held till its maturity.

Q: A 30-year Canada bond is issued with par value of $1,000, paying interest of $60 per year. If market…

A: Bonds are debt securities issued by Government or other companies, who seek to raise money from…

Q: Find the duration of a bond with a settlement date of May 27, 2023, and maturity date November 15,…

A: Macaulay duration determines the weighted average time to receive all the cash flows in the form of…

Q: Calculate the bond equivalent yield and effective annual return on a jumbo CD that is 120 days from…

A: Bond equivalent yield can be calculated from the nominal yield as below: Answer: Bond equivalent…

Q: Assume that a 6-month forward contract on a zero-coupon bond with market face value of Php12,000 and…

A: The forward price will the discounted rate of bond.

Q: Consider a 30-year Government of Canada bond with a face value of $1,000 that has a coupon rate of…

A: A bond is a fixed income instrument. It pays periodic interest payments (also known as coupon…

Q: Required: Find the duration of a bond with settlement date May 29, 2018, and maturity date November…

A: Settlement date = May 29, 2018Maturity date = November 19, 2027Coupon rate = 6%Yield to maturity…

Q: Suppose that you want to construct a 2-year maturity forward loan commencing in 3 years. The face…

A: a. To calculate the number of 5-year zeros required to make the initial cash flow equal to zero, we…

Q: Assume a par value of $1,000. Caspian Sea plans to issue a 13.00 year, annual pay bond that has a…

A: According to bartleby guidelines , if multiple questions are asked , then 1st question needs to be…

Q: a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c.…

A: A bond is defined as the financial instrument that is used to raise capital from the market at a…

Q: An investor uses £50,000 to buy 10-year bonds with a face value of £100. The bonds pay coupons…

A: The bond price is the discounted present value of the future cash flow that a bond will produce. It…

Concept explainers

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.

Question

#2
Assume a par value of $1,000. Caspian Sea plans to
issue a 11.00 year, semi-annual pay bond that has a
coupon rate of 8.11%. If the yield to maturity for the
bond is 7.79%, what will the price of the bond be?
Submit
Answer format: Currency: Round to: 2 decimal places.
unanswered
not_submitted
Attempts Remaining: Infinity
%23

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

# 1 Assume a par value of $1,000. Caspian Sea plans to issue a 5.00 year, annual pay bond that has a coupon rate of 3.00%. If the yield to maturity for the bond is 3.0%, what will the price of the bond be? Submit Answer format: Currency: Round to: 2 decimal places. unanswered not_submitted Attempts Remaining: Infinity %23
# 1 Assume a par value of $1,000. Caspian Sea plans to issue a 16.00 year, semi-annual pay bond that has a coupon rate of 8.17%. If the yield to maturity for the bond is 7.56%, what will the price of the bond be? Submit Answer format: Currency: Round to: 2 decimal places. unanswered not_submitted Attempts Remaining: Infinity #2 Assume a par value of $1,000. Caspian Sea plans to issue a 18.00 year, semi-annual pay bond that has a coupon rate of 7.93%. If the yield to maturity for the bond is 8.13%, what will the price of the bond be? Submit Answer format: Currency: Round to: 2 decimal places. unanswered not submitted Attempts Remaining: Infinity # 3 Assume a par value of $1,000. Caspian Sea plans to issue a 26.00 year, semi-annual pay bond that has a coupon rate of 16.00%. If the yield to maturity for the bond is 16.0%, what will the price of the bond be? Submit Answer format: Currency: Round to: 2 decimal places. unanswered
please send correct answer Q6
9
mni.3
Assume a par value of $1,000 Caspian Sea plans to issue a 10.00 year, semi-annual pay bond that has a coupon rate of 11.00%. If the yield to maturity for the bond is 11.0%, what wis the price of the bond be? Submit Answer format: Currency: Round to: 2 decimal places A bank offers 8.00% on savings accounts. What is the effective annual rate if interest is compounded monthly? Submit Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (x: 0092434) G unanswered not submitted Attempts Remaining: Infinity unanswered not submitted Attempts Remaining: Infinity
a. Reset the Data Section to its initial values. The price of this bond is 1,407,831. What would it be if there were only 9 or 8 years to maturity? Use the worksheet to compute the bond issue prices and enter them in the spaces provided. Bond issue price (9 years to maturity) __________________ Bond issue price (8 years to maturity) __________________ b. Compare these prices to the bond-carrying values found in the effective interest amortization schedule you originally printed out in requirement 3. Explain the similarity. c. Click the Chart sheet tab. The chart presented shows the price behavior of this bond based on years to maturity. Explain what effect years to maturity has on bond prices. Check your explanation by trying 8% as the effective rate (cell E10) and clicking the Chart sheet tab again. Also try 9%. When the assignment is complete, close the file without saving it again. Worksheet. Modify the BONDS3 worksheet to accommodate bonds with up to 20-year maturity. Use your new model to determine the issue price and amortization schedules of a 2,000,000, 18-year, 10% bond issued to yield 9%. Preview the printout to make sure that the worksheet will print neatly, and then print the worksheet. Save the completed file as BONDST. Hint: Expand both amortization schedules to 20 years. Expand the scratch pad to 20 years. Modify FORMULA1 in cell F17 to include the new ranges. Chart. Using the BONDS3 file, prepare a line chart that plots annual interest expense over the 10-year life of this bond under both the straight-line and effective interest methods. No Chart Data Table is needed. Put A23 to A32 in the Label format and then select A23 to A32, D23 to D32, and B40 to B49 as a collection. Enter all appropriate titles, legends, formats, and so forth. Enter your name somewhere on the chart. Save the file again as BONDS3. Print the chart.
ff2
aa.5
1.b A 30-year Canada bond is issued with par value of $1,000, paying interest of $60 per year. If market yields increase shortly after the bond is issued, what happens to the following bond's d. Current yield Options: will increase will decrease will not chnage
A bond, described in the exhibit below, is sold for a settlement on 8 April 2021.Annual Coupon rate:12%Coupon payment frequency: monthlyMaturity date*: 11396 + Settlement dateDay count convention : 30 / 360Annual yield to maturity:9%Face value:1,000 USDCalculate the dirty price (full price), clean price (flat price) and accrued interest (AI). * Example if your ID number 9876, then 8 April 2021 + 9876 days = 22 April 2048
112 O The market price of a semi-annual pay bond is $971.90. It has 14.00 years to maturity and a coupon rate of 8.00%. Par value is $1,000. What is the effective annual yield? Submit Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (ex: 0.092434)) Show Hint Assume a par value of $1,000. Caspian Sea plans to issue a 11.00 year, semi-annual pay bond that has a coupon rate of 7.82 %. If the yield to maturity for the bond is 8.39%, what will the price of the bond be? Submit Answer format: Currency: Round to: 2 decimal places. Show Hint