Bond X is a premum bond making semiannual payments. The bond has a coupon rate of 7 percent, a YTM of 5 percent, and 19 yearsto maturity Bond Y is a discount bond making semiannual payments. This bond has a coupon rate of 5 percent a YTM of 7 percent.and also has 19 years to maturity. Both bonds have a par vaiue of $1,000a. What is the price of each bond today?b. interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now? In 10 years? In 14 years?in 18 years? In 19 years?Note: For all requirements, do not round intermediate calculations and round your answers to 2 decimal places, *g. 32.16.a. Price todayb. Price in 1 yearPrice in 10 yearsPrice in 14 yasPrice in 18 yearsPrice in 19 yearsBond XBond Y

Bond price at par:A bond is said to be valued at par when its face value and current market value…

Bond X is a premmum bond making semiannual paymerns. The bond has a coupon rate of 7 percent. a YTM of 5 percent and to years to maturity Blond Y is a discount bond making semarysual payments. This bond has a coupon rate of 5 percent, a YTM of 7 percent. and also has 19 years to maturity. Both bonds have a par varue of $1,000 a. What is the price of each bond today? b. f interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now? in 10 years? In 14 years in 18 years In 19 years? Note: For all requirements, do not round intermediate ceiculations and round your answers to 2 decimal places, g. 32.16

Bond X is a premmum bond making semiannual paymerns. The bond has a coupon rate of 7 percent. a YTM of 5 percent and to years to maturity Blond Y is a discount bond making semarysual payments. This bond has a coupon rate of 5 percent, a YTM of 7 percent. and also has 19 years to maturity. Both bonds have a par varue of $1,000 a. What is the price of each bond today? b. f interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now? in 10 years? In 14 years in 18 years In 19 years? Note: For all requirements, do not round intermediate ceiculations and round your answers to 2 decimal places, g. 32.16

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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One bond has a coupon rate of 7.8%, another a coupon rate of 9.4%. Both bonds pay interest annually, ahve 7-year maturities, and sell at a yield to maturity of 7%. a. If their yields to maturity next year are still 7%, what is the rate of return on each bond?
A bond sells for $866.09 and has a coupon rate of 6.40 percent. If the bond has 14 years until maturity, what is the yield to maturity of the bond? Assume semiannual compounding. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Consider a 25-year bond with a face value of $1,000 that has a coupon rate of 5.8%, with semiannual payments. a. What is the coupon payment for this bond? b. Draw the cash flows for the bond on a timeline. a. What is the coupon payment for this bond? The coupon payment for this bond is $ *** (Round to the nearest cent.)
The Salem Company bond currently sells for $848.55, has a coupon interest rate of 14%and a $1000 par value, pays interest annually, and has 16 years to maturity. a. Calculate the yield to maturity (YTM) on this bond. b. Explain the relationship that exists between the coupon interest rate and yield to maturity and the par value and market value of a bond.
Suppose you are given the following information about four different, default-free bonds, each with a face value of $1,000. The coupon bonds have annual payments. The yield to maturity of bond A with a maturity of 1 year and a coupon rate of 0% is 2%. The yield to maturity of bond B with a maturity of 2 year and a coupon rate of 10% is 3.908%. The yield to maturity of bond C with a maturity of 3 year and a coupon rate of 6% is 5.840%. The yield to maturity of bond D with a maturity of 4 year and a coupon rate of 12% is 5.783%. Given this information, what is the four-year spot rate?
Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 11 percent, a YTM of 9 percent, and 15 years to maturity. Bond Y is a discount bond making semiannual payments, This bond has a coupon rate of 9 percent, a YTM of 11 percent, and also has 15 years to maturity. Both bonds have a par value of $1,000 a. What is the price of each bond today? b. If interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now? In 6 years? In 10 years? In 14 years? In 15 years? Note: For all requirements, do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Bond X Bond Y a. Price today b. Price in 1 year Price In 6 years Price in 10 years Price in 14 years Price in 15 years
Suppose that a bond pays semiannual coupons in the sequence 25, 30, 25, 35, 25, 40, ..., 25, 85. If the redemption value is 2500 dollars and the yield rate is 8.6 percent convertible semiannually, what is the price of the bond? Answer= dollars.
Bond P is a premium bond with a 10 percent coupon. Bond D is a 6 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 8 percent, and have five years to maturity. (Assume par value of K1,000)(i) What is the current yield for Bond P and Bond D?(ii) If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond P? For Bond D?(iii)Explain your answers and the interrelationship among the various types of yields.
1)Your broker offers to sell for $1,157 a AAA-rated bond with a coupon rate of 7 percent and a maturity of six years. Given that the interest rate on comparable debt is 4 percent, calculate the bond's price. Assume that the bond pays interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. 2)Is your broker fairly pricing the bond? 3)the bond should or should not be purchased?
A bond pays annual interest. Its coupon rate is 7.0%. Its value at maturity is $1,000. It matures in 4 years. Its yield to maturity is currently 4.0%. The modified duration of this bond is ______ years. 3.65 4.00 3.51 3.30
You have a bond with the following features: - Semi-annual coupon payments. - Coupon rate 7.60%. - Face value $1,000. - 3.5 years to maturity. - Current market price $1,130. Requirements (A, B, and C are independent): 1. Calculate the duration and modified duration for this bond. Duration ___ Mduration ___ 2. Now, let’s assume the modified duration of this bond is 3 years. If the yield increases by 30 bps (basis points), what will the new price of the bond using modified duration? 3. If the yield drops by 75 bps, what is the actual new price of the bond?
Please give me answer very fast in 5 min saur

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