Calculate the duration of a five-year bond with a face value of $1,000 and a coupon rate of 8%. Assume that the current interest rates are 10%. What will your answer be if the current interest rates fall to 7%? Show all your calculations.

Q: Consider a bond with a principal of $1,000 that pays a coupon of $100 per year. If the bond matures…

A: Bond: It is a fixed income instrument that represents a loan made by an investor to a borrower. We…

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: he bond matures in 10 years, at which time it will pay 1000. If the coupon rate is 7% and discount…

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Q: ou buy a bond today. The bond has a face value of $1000, will mature in 10 years, and pays coupon on…

A: Given: Face Value of bond “FV” = $1000 Annual coupon rate = 8% Annual Coupon “PMT” = 8%*1000 =$80…

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Q: What are the cash flows generated at the end of five years 1,000 bond if interest rates 5%?

A: Since there is more than 1 question, we will answer the first one for you. Please repost others…

Q: What is the price of the seasoned Treasury Bond that has a 5 percent coupon rate paid semi-annually…

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Q: suppose you bought a 5- year, 2.0% coupon, treasury note at par. two years later you sold the bond…

A: Given:Face value of the bond (FV): $1000Coupon rate: 2.0%Number of years: 5Purchase price (initial…

Q: You purchase a bond with a $100, 000 face value. a. The bond has a semi annual coupon of $3,880 and…

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Q: How much (in dollars) will you pay?

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Q: Find the value of a 5.9% Coupon Bond with a required return of 12.21% and 20 years to maturity. Keep…

A: PV = $534.81Explanation:Step 1:Use financial calculatorFV=1000N= 20 years (annually)PMT=1000*5.9% =…

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Q: Consider investing your savings in a coupon bond with the following properties: Maturity: 5 years…

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Q: Consider the following: today's interest rate for a 15-year bond is 8%; today's interest rate for a…

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Q: What is the duration of a bond with a coupon of 5%, paid semi-annually and a face value of $100. The…

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Q: Calculate the Macaulay Duration for a six-year annual coupon paying bond with a coupon of 3.5%,…

A: Time to Maturity6Coupon 3.50%Yeild-to-maturity5.50%Settlement date01-01-2014Maturity…

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A: Information Provided: Simple loan PV = $1,000,000 FV  = $1,009,000 Term = 1 year Discount bond…

Q: Assume that you wish to purchase a bond with a 17-year maturity, an annual coupon rate of 11.5%, a…

A: > Given data> Rate = 9.5% / 2 = 4.75%> Number of periods  (Nper ) = 17*2 = 34> Payment…

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Q: Suppose that for a price of $960 you purchase a 7-year Treasury bond that has a face value of $1,000…

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Q: uppose a bond has a coupon rate of 9.5%, a remaining maturity of 15 years, and a face value of…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: Par 100.00 12.00% 2 Y (constan 4.71 Y year 59.17 y 15.00% t outstandir coupon principal payment…

A: Coupon rate = 12% Yield to maturity = 15% Bond value = 100

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Q: Suppose that a bond has a face value of $200 000 and its maturity date is 10 years from now. The…

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Q: Assume that you purchase a 30-year $1,000 par value bond, with a 10% coupon, and a yield of 9%.…

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Q: A bond has 10 years until maturity, a coupon rate of 8.1%, and sells for $1,190. Interest is paid…

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Q: Suppose you have bough the above zero-coupon bond, with value and duration equal to your obligation.…

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Q: A bond sells for $900 and is expected to trade for $1000 in one year's time. If the return is 12%,…

A: In this question we need to compute the coupon rate on a bond.

Q: How much should you pay for a $1,000 bond with 8% coupon, annual payments, and 8 years to maturity…

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Q: Consider the following scenario: A bond has a price of $95 (Par Value 100). It matures in 7 years…

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Q: Suppose you purchase a 10-year bond with 6% annual coupons. You hold the bond for four years and…

A: Bonds are debt instruments issued by companies. The issuing company pays periodic interest or…

Q: Assume you can buy a bond that has a par value of $1000, matures in 10 years, yielding 6% and has a…

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