Case: Consider a bond has 4 years to maturity and pays coupon payments of £70 annually andits par value is £1500. Moreover, the yield to maturity is 6% and compounded annually.Q1: What is the bond price? Hint: apply the present value operator.* I1430.6971530.6781330.6781530.697Q2: Which one of the following options does provide Macaulay and modified durations,respectively?3.433 and3.222O3.733 and3.5223.533 and3.3223.433 and3.122Q3: Suppose that yield compounded annually on the bond increases by 1% from the originalyield. Which one of the following options does state the bond's approximated price usingmodified duration? *1180.3081380.3081280.3081480.308

The question is based on the concept of Financial Accounting. The fair value or the fair price of…

Answered: Case: Consider a bond has 4 years to…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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An annual bond has a face value of $10,000, a coupon rate of 9.9%, a yield to maturity of 11.1% and has 4 years remaining to maturity. What is the price of the bond? Hlp me
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Data table ↑ The current zero-coupon yield curve for risk-free bonds is as follows: What is the price per $100face value of a two-year, zero-coupon, risk-free bond? The price per $100 face value of the two-year, zero-coupon, risk-free bond is $ (Click on the following icon in order to copy its contents into a spreadsheet.) Maturity (years) YTM 1 4.98% 2 5.48% 3 5.78% Print Done 4 5 5.96% 6.09% (Round to the nearest cent.) - X
1. How to calculate the value of a 6 year 2% coupon bond with semiannual payments, 1000 par. Expected return is the risk free rate of 3%. 2. Price a 5 year 4% semiannual coupon bond if the yield to maturity is 6% (write the price as if par is 100, use 5 decimal places)
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You find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2022. All of the bonds have a par value of $1,000 and pay semiannual coupons. Rate ?? 6.252 6.163 Maturity Month/Year May 36 May 41 May 51 Bid 103.5462 104.4952 ?? Asked 103.6340 104.6409 ?? Change Ask Yield +.3015 2.329 +.4293 +.5405 ?? 4.031 In the above table, find the Treasury bond that matures in May 2036. What is the coupon rate for this bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

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Case: Consider a bond has 4 years to maturity and pays coupon payments of £70 annually and its par value is £1500. Moreover, the yield to maturity is 6% and compounded annually. Q1: What is the bond price? Hint: apply the present value operator. * 1430.69 7 1530.67 8 1330.67