Consider a 10000 par value, 8-year bond bearing a 2.5% annual coupon rate. Coupons pay out every year, starting one year after the bond is purchased. The bond is purchased for P to yield an annual effective rate of i. Assuming the bond redeems at par value, it is known that the book - value of the bond immediately after the 3 coupon is paid is equal to 9247.42. Find P. Give your answer rounded to the nearest whole number (i.e. X).

Consider a 10000 par value, 8-year bond bearing a 2.5% annual coupon rate. Coupons pay out every year, starting one year after the bond is purchased. The bond is purchased for P to yield an annual effective rate of i. Assuming the bond redeems at par value, it is known that the book - value of the bond immediately after the 3 coupon is paid is equal to 9247.42. Find P. Give your answer rounded to the nearest whole number (i.e. X).

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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You purchase a bond with a coupon rate of 5.9 percent and a quoted price of $1,053. If the next semiannual coupon is due in four months, what is the invoice price and the YTM of the bond?Assume the bond matures in 8 years.
Suppose that for a price of $960 you purchase a 7-year Treasury bond that has a face value of $1,000 and a coupon rate of 4%. If you sell the bond one year later for $1,120, what was your rate of return for that one-year holding period? The rate of return for the one-year holding period was %. (Round your response to one decimal place.)
You purchase a bond with an invoice price of $1,047. The bond has a coupon rate of 10 percent, and there are 4 months to the next semiannual coupon date. What is the clean price of the bond? Enter the answer with 2 decimals (e.g. 954.23).
You buy an 8.6% coupon, paid annually, 5-year maturity bond for $960. A year later, the bond price is $1,070. Face value of the bond is $1,000. a. What is the yield to maturity on the bond today? (Round your answer to 2 decimal places.) % b. What is the yield to maturity on the bond in one year? ( Round your answer to 2 decimal places.) c. What is your rate of return over the year? (Round your answer to 2 decimal places.)
USE THE FOLLOWING INFORMATION FOR THE NEXT 3 QUESTIONS: Part 1 of 3: Assume that you purchase a 30-year $1,000 par value bond, with a 10% coupon, and a yield of 9%. Immediately after you purchase the bond, yields change to 7% and remain at that level to maturity. Assume that you hold the bond for 8 years and then sell it. Interest is paid annually. What is the price of the bond today? Group of answer choices A. $1,991.87 B. $1,538.14 C. $1.732.51 D. $1,102.74 E. $1,225.16
A bond has 10 years until maturity, a coupon rate of 8.1%, and sells for $1,190. Interest is paid annually. (Assume a face value of $1,000.) a. If the bond has a yield to maturity of 9.9% 1 year from now, what will its price be at that time? Note: Do not round intermediate calculations. Round your answer to nearest whole number. Price b. What will be the rate of return on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign. Rate of return % c. If the inflation rate during the year is 3%, what is the real rate of return on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign. Real rate of return %
Using an annual effective interest rate of 10%, the Macaulay Duration (in years) of a 10-year 100 par value bond with annual coupons of X is 6.96 years. Calculate X. Give your answer as a decimal rounded to two places (i.e. X.XX).
What is the yield to call of a 20-year to maturity bond that pays a coupon rate of 6.54 percent per year, has a $1,000 par value, and is currently priced at $1,104? The bond can be called back in 7 years at a call price $1,056. Assume annual coupon payments. Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box) You should use Excel or financial calculator.
Consider the following scenario: A bond has a price of $95 (Par Value 100). It matures in 7 years and pays coupons semi-annually. Find the coupon rate of the bond (in annual terms) that would yield a duration of 5.5.
A bond has 10 years until maturity, a coupon rate of 8.3%, and sells for $1,170. Interest is paid annually. ( Assume a face value of $1,000.) If the bond has a yield to maturity of 9.7% 1 year from now, what will its price be at that time? Note: Do not round intermediate calculations. Round your answer to nearest whole number. What will be the rate of return on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign. If the inflation rate during the year is 3%, what is the real rate of return on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.
A 15-year Treasury bond is issued with face value of $1,000, paying interest of $46 per year. If market yields increase shortly after the T-bond is issued, what is the bond’s coupon rate? (Enter your answer as a percentage rounded to 1 decimal place.) Coupon rate ?%
A bond has 6 years remaining to maturity, pays annual coupons (yesterday) of $7.4, and has a face value of $100. The current price of the bond is $73.701 and the price next year is expected to be $76.767. (Interest rates are not expected to change over the coming year.) What is the return on the bond if you hold it for one year?by Formula pls.

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