Below is a list of prices for zero-coupon bonds of various maturities. Price of $1,000 Par Maturity (Years) Bond (Zero-Coupon) 1 $908.95 2 878.68 3 806.14 a. A 5.0% coupon $1,000 par bond pays an annual coupon and will mature in 3 years. What should the yield to maturity on the bond be? (Round your answer to 2 decimal places.) Yield to maturity % b. If at the end of the first year the yield curve flattens out at 8.5%, what will be the 1-year holding-period return on the coupon bond? (Round your answer to 2 decimal places.) Holding-period return %

Below is a list of prices for zero-coupon bonds of various maturities. Price of $1,000 Par Maturity (Years) Bond (Zero-Coupon) 1 $908.95 2 878.68 3 806.14 a. A 5.0% coupon $1,000 par bond pays an annual coupon and will mature in 3 years. What should the yield to maturity on the bond be? (Round your answer to 2 decimal places.) Yield to maturity % b. If at the end of the first year the yield curve flattens out at 8.5%, what will be the 1-year holding-period return on the coupon bond? (Round your answer to 2 decimal places.) Holding-period return %

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

See similar textbooks

Similar questions

What is the price of the bond given the information below. The bond makes semiannual interest payments. (Do not round intermediate calculations, round answer to two decimals, i.e. 32.16) Coupon Rate:8.5% YTM:9.5% Maturity (years):8 Par value: $2,000
Consider the following bond where the coupons are paid annually, Bond Scotiabank Price $1008.50 YTM 9% Years to maturity 8 years What is the coupon rate of this bond? The face value of the bond is $1,000. Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your response below. Enter your answer rounded to 2 DECIMAL PLACES.
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 %
es Find the duration of a 6.6% coupon bond making semiannually coupon payments if it has three years until maturity and has a yield to maturity of 6.6%. What is the duration if the yield to maturity is 9.0%? Note: The face value of the bond is $1,000. Do not round intermediate calculations. Round your answers to 2 decimal places. 6.6% YTM 9% YTM Duration years years
Zero-Coupon Bonds (ZCBS) with maturity in 1 and 5 years are available on the market. Their redemption value is £100, and they sell for £90 (1-year ZCB) and £84 (5-year ZCB). Find the spot rates corresponding to the ZCBs' prices 数字 i1 = % i5 数字 Enter a percentage correct to 2 decimal places % Calculate the forward rate 1,5 i1,5 数字 Enter a percentage correct to 2 decimal places %
The following table summarizes current prices of various zero-coupon bonds (expressed as a percentage of face value): Bond A B C D Maturity (years) 1 2 3 4 Price (per $100 face value) 96.62 82.56 82.69 83.26 E.G for bond A it will mature in 1 year and has a current bond price of $96.62. For bond B, it will mature in 2 years and had a current bond price of $82.56 Assume the YTM for each bond doesn't change over time. After two years, what is the price for bond D? 1. bond A 2. bond B 3. bond C 4. Bond D
What are the Modified Duration and Macaulay Duration of the following bond? Coupon Rate = 8% (Semi-annually paid) YTM = 9% Maturity = 2 Years Par Value = 1,000 (Hint: this question is similar to Example 1 and Example 2 on slides) ModD = 1.886 and MacD = 1.805 ModD = 1.784 and MacD = 1.954 ModD = 1.954 and MacD = 1.784 ModD = 1.805 and MacD = 1.886
A 2-year maturity bond with face value of $1,000 makes annual coupon payments of $116 and is selling at face value. What will be rate of return on the bond if its yield to maturity at the end of the year is: Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. 6% b. 11.6% c. 13.6% Rate of Return % % %
You are given the following information with respect to a non-callable bond: par amount: 1,000 • term to maturity: 4 years annual coupon rate: 8% payable annually. Time 0 1 2 3 1-Year Annual Forward Interest Rates Scenario X Scenario Y 7% 7% 8% 10% 7% 6% 7% 5% Each interest rate scenario has an equal probability of occurring. Calculate the value of the bond (i.e. the expected present value of the bond payments). A 1,000.00 B 1,018.40 C 1,022.80 D 1,030.39 E 1,031.07
Consider the following bond where the coupons are paid annually, Bond CIBC Price $1020.50 YTM 4% Years to maturity 10 years What is the coupon rate of this bond? The face value of the bond is $1,000. Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your response below. Enter your answer rounded to 2 DECIMAL PLACES.
Please show working Please answer ALL OF QUESTIONS 1 AND 2 1. A 7% semiannual coupon bond matures in 6 years. The bond has a face value of $1,000 and a current yield of 7.5219%.a. What is the bond's price? Do not round intermediate calculations. Round your answer to the nearest cent.b. What is the bond's YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answers to two decimal places. 2. Nesmith Corporation's outstanding bonds have a $1,000 par value, a 7% semiannual coupon, 18 years to maturity, and a 9% YTM. What is the bond's price? Round your answer to the nearest cent.
A two-year bond with par value $1,000 making annual coupon payments of $106 is priced at $1,000. Required: a. What is the yield to maturity of the bond? (Round your answer to 1 decimal place.) b. What will be the realized compound yield to maturity if the one-year interest rate next year turns out to be (a) 8.6%, (b) 10.6%, (c) 12.6%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS