Assume coupons are paid annually. Here are the prices of three bonds with 10-year maturities. Assume face value is $100. Bond Coupon (%) 2 4 8 Price (%) 80.57 97.19 134.92 a. What is the yield to maturity of each bond? b. What is the duration of each bond? Complete this question by entering your answers in the tabs below. Required A Required B What is the yield to maturity of each bond? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Bond Coupon (%) 2 YTM 6.00% 4 8 7.42% 7.01 %

Assume coupons are paid annually. Here are the prices of three bonds with 10-year maturities. Assume face value is $100. Bond Coupon (%) 2 4 8 Price (%) 80.57 97.19 134.92 a. What is the yield to maturity of each bond? b. What is the duration of each bond? Complete this question by entering your answers in the tabs below. Required A Required B What is the yield to maturity of each bond? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Bond Coupon (%) 2 YTM 6.00% 4 8 7.42% 7.01 %

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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Explain why are the bond prices for A and B different or the same? Explain your answer clearly.
Assume the following: Bond A coupon = 6%, maturity = 5 years, yield to maturity = 6% Bond B coupon = 0%, maturity = 5 years, yield to maturity = 6% Bond C coupon = 6%, maturity = 5 years, yield to maturity = 6.5% Which of the following statements concerning duration is correct? Group of answer choices A. Duration of C<Duration of A=Duration of B. B. Duration of A>Duration of B>Duration of C. C. Duration of C < Duration of A < Duration of B. D. Duration of A< Duration of B<Duration of C.
Please answer all 4 prices with explanations thx
Please answer 6D.
Prepare a duration table for a coupon bond using the following assumptions: a. $100,000 par value b. 7% coupon rate c. 10-year maturity d. Annual interest payments e. Discount rate of 12%
Suppose the term structure of interest rate is flat. Consider the following four bonds: Bond Term to Maturity (year) Coupon rate YTM 1 5 10% 7% 2 3 7 7 10% O a. 2,3,4,1 O b. 2,1,4,3 O c. 1,2,3,4 O d. 4,3,2,1 3% 3% 7% 4 7 If the yield-to-maturity for all bonds changes by 1%, rank the bonds from the lowest percentage change in price to the largest percentage change in price based on duration approximation. 7% 5%
help
The following is a list of prices for zero-coupon bonds of various maturities. Maturity (years) 1 2 Price of Bond $ 930.00 902.97 3 4 829.62 772.99 Required: a. Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments. b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year. Assume annual coupon payments. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Maturity (Years) Price of Bond YTM 1 $ 930.00 % 2 $ 902.97 % 3 $ 829.62 % 4 $ 772.99 %
Show all workings. Complete the following table and draw a graph showing how bond pricefor each bond changes over time as they move towards their maturitydates. Describe the relationship between bond prices and timeremaining for maturity.YearsreminingtomaturityBOND ACoupon rate = 8% p.a.Market interest rate =6% p.a.BOND BCoupon rate = 6% p.a.Market interest rate =6% p.a.BOND CCoupon rate = 4% p.a.Market interest rate =6% p.a.109876543210
3 An 8%, 8-year bond pays annual coupons and has 6 years to maturity. If the market interest rate is 9%, calculate the price of this bond. Show the (abbreviated) time line, the key entries/steps of FCS, and the (abbreviated) equation/expression of NS. ation Typing tips:
Consider the following bonds: Bond A B CD с Coupon Rate (annual payments) 0.0% 0.0% 4.3% 7.7% The percentage change in the price of bond A is |___%. (Round to one decimal place.) What is the percentage change in the price of each bond if its yield to maturity falls from 6.9% to 5.9%? The percentage change in the price of bond B is %. (Round to one decimal place.) Maturity (years) 15 The percentage change in the price of bond C is %. (Round to one decimal place.) The percentage change in the price of bond D is %. 21500
A bond has the following terms: 1) $100 face value, 2) 3-year maturity and 3) 15% annual coupon rate. The bond's current yield-to-maturity is 10% per annum. Which one of the following answers is closest to the bond's duration? (Please round your calculation to the nearest 2nd decimal.) Select one: O a 2.55 years O b. 2.65 years OC 2.75 years O d. 2.85 years O e. 2.95 years

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