Assume you purchase (at par) one 12-year bond with a 6.10 percent coupon and a $1,000 face value. Suppose you are only able toreinvest the coupons at a rate of 4.10 percent. If you sell the bond after 7 years when the yield to maturity is 7.10 percent, what is yourrealized yield? (Do not round intermediate calculations. Round your answers to 2 decimal places.)Answer is complete but not entirely correct.FVSelling priceRealized yield$ 483.26 X$959.115.37 %

Bonds are different kind of debt instruments where there is interest on that and par value of bond…

Assume you purchase (at par) one 12-year bond with a 6.10 percent coupon and a $1,000 face value. Suppose you reinvest the coupons at a rate of 4.10 percent. If you sell the bond after 7 years when the yield to maturity is 7.10 per realized yield? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Answer is complete but not entirely correct. FV Selling price Realized yield $ 483.26 x $ 959.11 5.37 %

Assume you purchase (at par) one 12-year bond with a 6.10 percent coupon and a $1,000 face value. Suppose you reinvest the coupons at a rate of 4.10 percent. If you sell the bond after 7 years when the yield to maturity is 7.10 per realized yield? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Answer is complete but not entirely correct. FV Selling price Realized yield $ 483.26 x $ 959.11 5.37 %

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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What is the price today of a 10 year 3 percent coupon bond that has a par value of $1000 and a yield to maturity of 3 percent? Answer: $ *DO NOT USE COMMA OR DOLLAR SIGN IN YOUR ANSWER.
What is the dollar price of a zero coupon bond with 13 years to maturity, semiannual compounding, and a par value of $1,000, if the YTM is: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. 4 percent b. 8 percent C. 12 percent ( Prev 1 of 10 Next >
Compute the price of a 5.9 percent coupon bond with 15 years left to maturity and a market interest rate of 9.6 perceL (Assume interest payments are semiannual.) (Do not round Intermedlote calculations. Round your finol answer to 2 declmal places.) Bond price Is this a discount or premium bond? O premium bond O discount bond ला here to search | 近 0 F3 F4 F5 F7 F8 F10 F11
You purchase a zero coupon bond with 15 years to maturity and a yield to maturity of 5.77 percent. The bond has a par value of $1,000. What is the implicit interest for the first year? Assume semiannual compounding. Multiple Choice $24.31 $21.82 $23.94 $24.94 $24.11
Give typing answer with explanation and conclusion
Consider the following $1,000 par value zero-coupon bonds: Bond Maturity A 1 BU C D Years until Yield to Interest rate 2 3 Maturity (years) 1 2 3 4 Maturity 8.00% 9.00 9.50 10.00 Required: a. According to the expectations hypothesis, what is the market's expectation of the one-year interest rate three years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What are the expected values of next year's yields on bonds with maturities of (a) 1 year; (b) 2 years; (c) 3 years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) YTM Check my work % % % %
Rolling Company bonds have a coupon rate of 6.20 percent, 25 years to maturity, and a current price of $1,196. What is the YTM? The current yield? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) YTM % Current yield %
You purchase a zero coupon bond with 14 years to maturity and a yield to maturity of 5.01 percent. The bond has a par value of $1,000. What is the implicit interest for the first year? Assume semiannual compounding. Multiple Choice $24.74 $24.36 $24.53 $22.20 $25.37
You purchase a zero coupon bond with 17 years to maturity and a yield to maturity of 5.13 percent. The bond has a par value of $1,000. What is the implicit interest for the first year? Assume semiannual compounding. Multiple Choice $21.41 $21.08 $21.96 $19.22 $21.23
do not use image only typing answer fully calculation.
1. The rate of return on a 10 percent coupon bond that is initially purchased at par for $1,000 and sells for $1,100 the next year is ___% 2. The current interest rate on a 10-year coupon bond (with face value = $1,000 and annual coupon rate = 3.25%) is 2.42%. This implies: (there are more than one answer) Question 14 options: the price of this bond is $1,000. the price of this bond is greater than $1,000. the price of this bond is less than $1,000. the buyer of the bond will have a return of 2.42% if she sells the bond next year. the buyer of this bond will receive $32.5 from the bond issuer every year before maturity while holding the bond. 3. True or False? Last year you purchased a bond with an interest rate of 5%. Now the interest rate on the bond market drops to 4%. Then the face value of your bond is lower.

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