Calculate the duration of a coupon bond with the following features. What general conclusion can we make about the duration of coupon bonds relative to their time to maturity?       Face value of $1000       Five years to maturity       Coupon rate of 11%, paid semi-annually       Current price of $970             (Hint: The effective annual yield should be 12.1604%.)

Q: Consider a 20 year bond with a 10% coupon rate paid and compounded annually. A $1000 face value and…

A: The price of the bond is what the investors are willing to pay today.

Q: What is the duration of the following bond: $1,000 par value, 6% annual coupon, 4 years to maturity,…

A: Variables in the question:Par value=$1000Annual coupon=6% (assumed paid annually)N=4 yearsYTM=6.5%

Q: Consider the following $1,000 par value zero-coupon bonds: Years to Maturity 1 Bond A B C D 3 Bond B…

A: Here,BondYears to MaturityYTM(%)A16.4%B27.4C37.9D48.4

Q: Consider a coupon bond that pays interest semiannually has a par value of $1000, matures in 9 years,…

A: SEMI ANNUAL PERIOD (9*2)  18 COUPON RATE (7%/2) 3.50% PMT (COUPON AMOUNT) $35.00 YIELD TO…

Q: Compute the yield to maturity on a bond with a $1000 par value, a coupon rate of 3.75% with…

A: The yield to maturity rate of return realized by holding the bond till the maturity of bond and…

Q: What is the current price of a 10% coupon bond (with standard semiannual payments) if the…

A: Part 1: Coupon rate = 10% Yield to maturity = 5% Maturity time period = 2 years Face value = $1,000

Q: Suppose a ten-year, $1,000 bond with an 8.0% coupon rate and semiannual coupons is trading for…

A: A bond is a type of financial instrument that an organization issues to investors to raise money for…

Q: A 2-year maturity bond with face value of $1,000 makes annual coupon payments of $108 and is selling…

A: The bond is selling at face value ($1,000), which means the purchase price (P) is equal to the face…

Q: Calculate the current yield of a bond with $1,000 face value, 7.50% coupon rate, quarterly coupon…

A: A bond is an instrument that represents the loan that is made by the investor to the company and…

Q: Suppose a bond is priced at $1108, has 18 years remaining until maturity, and has a 8% coupon, paid…

A: Coupons are paid on bonds periodically according to stated interest rate on the bonds and frequency…

Q: (b) If a government bond is expected to mature in two years and has a current price of RM950,…

A: Current price of bond = RM950Par value = RM1000Coupon rate = 10%To find: Bond's yield and price…

Q: What is the Yield-to-Maturity of a bond with a par value of $1000, a current price of $819.36, 11…

A: The objective of the question is to calculate the Yield-to-Maturity (YTM) of a bond. The YTM is the…

Q: What is the price of a bond with a coupon rate of 5.20% and semi-annual payments, if the…

A: Time value of money :— According to this concept, value of money in present day is greater than the…

Q: Assume the spot rates for the next six years are given by:s1= 0.03, s2= 0.0385, s3= 0.0446, s4=…

A: a. Computing the Price of the Bond: The price of the bond is computed as the sum of the present…

Q: The current market price of a 5-year zero-coupon bond is $654.321. The face value of the bond is…

A: We have to use the formula for the holding period return to calculate the monthly yield. Please note…

Q: Consider a long forward contract to purchase a coupon-bearing bond whose current price is $910. We…

A: Forward contract as the name suggests is not related to the present scenario. It means the buying…

Q: What is the semi-annual coupon bond's nominal yield to maturity (YTM), if the years to maturity is…

A: YTM stands for Yield to maturity which is defined as the aggregate return anticipated on bond when…

Q: Suppose you bought a five-year zero-coupon Treasury bond for $800 per $1000 face value. What is the…

A: Zero coupon Bond is the bond issued at discount and no interest is paid during the life of the…

Q: What is the duration of the following bond:$1,000par value,6%annual coupon, 4 years to maturity, and…

A: Par value = $1,000Annual coupon rate = 6%Yield to maturity (YTM) = 6.5%Years to maturity = 4 years

Q: Calculate the duration and convexity of a bond, 20 years to maturity bond and 6% coupon rate. Assume…

A: The duration and the convexity of the bond are measures of the sensitivity analysis of the bond. The…

Q: A ten-year maturity bond with a coupon rate of 6% is now selling at $1,085. What are the current…

A: Here,CouponRate is 6%Current Price of Bond is $1,085Time Period of Bond is 10 yearsFace Value of…

Q: You have a 15 year maturity with a yield of 0.06 yield (in decimals), with duration of 11 years and…

A: Duration of bond=11 yearsConvexity of bond=116.70Increase in yield=0.92%Current price=$805.76

Q: Assume a 1,000 face value bond with 20 years left until maturity. If the coupon rate is 10%, paid…

A: Using financial calcularor, FV = 1000 N = 20 *2 =40 PMT = 1000*10%/2 =50