During a period of severe inflation, a bond offered a nominal HPR of 87% per year. The Inflation rate was 79% per year. What was the real HPR on the bond over the year?

During a period of severe inflation, a bond offered a nominal HPR of 85% per year. The inflation rate was 76% per year. a. What was the real HPR on the bond over the year? (Round your answer to 2 decimal places.) Real HPR % b. Find the approximation Freal Inom i. Compare your answer in part b to the one in part a. Approximation % -

A 10-year government bond has face value of OR 200 and a coupon rate of 6% paid semiannually. Assume that the interest rate is equal to 8% per year. What is the bond’s price? What is the reason for the difference in price on an annual and semiannually basis? Discuss the role of financial managers.

Calculate the real hpr on the bond

The rate of inflation for the next 12 months (Year 1) is expected to be 1.4 percent; it is expected to be 1.8 percent the following year (Year 2); and it is expected to be 2.0 percent every year after Year 2. Assume the real risk-free, r*, is 3 percent for all maturities. What should be the yield to maturity on risk-free bonds that mature in (a) one year, (b) five years, and (c) 10 years.

The outstanding bonds of Winter Tires Inc. provide a real rate of return of 4.2 percent. If the current rate of inflation is 5.8 percent, what is the actual nominal rate of return on these bonds?

A bond that matures in 1212 years has a $1 comma 0001,000 par value. The annual coupon interest rate is 1414 percent and the market's required yield to maturity on a comparable-risk bond is 1515 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually?

Suppose you can observe that 1-year bond interest rate is 4%, 2-year bond interest rate is 8%, and 3-year bond interest rate is 10% at time t. It is also known that the term premium on a 2-year bond is 1% and the term premium on a 3-year bond is 1.5%. a) What are the market's expected 1-year bond interest rates for the next two years from time t? b) How to interpret those expected short-term interest rates? (what would be the "possible" economic meanings in the expected short- term interest rates?) Discuss as least two "candidates" to explain them.

A 5-year government bond has a face value of £1,000 and an annual nominal couponrate of 8%. Assume that the relevant nominal market interest rate (annualized) is equalto 10%. The coupon payments are made quarterly.(a) Calculate the present value of the bond  and the effective market interest rate.

A seven-year government bond makes annual coupon payments of 5% and offers an interest rate (ie. YTM) of 3% annually compounded. Suppose that one year later the bond still yields 3%.    a) What is the bond price in year 0?  b) What is the bond price in year 1?  c) What return has the bondholder earned over the first year?