Fifteen years ago your grandfather purchased for you a 20-year $1,000 bond with a coupon rate of 9 percent. You now wish to sell th that yields are 6 percent. What price should you receive for the bond? Assume that the bond pays interest annually. Use Appendix Ba answer the question. Round your answer to the nearest dollar.

Q: Suppose your organization has issued a 30 year, 1,000,000 par-value bond with semi-annual coupons of…

A: Offer for redemption should be done if market interest rates are above the coupon rate and should…

Q: 5 years ago, you purchased a $1,000 bond for $950. The bond coupon rate is 6% per year paid monthly,…

A: Maturity of bond means that the bond value will be paid back to the lender of the money. When bonds…

Q: Michelle Walker is interested in buying a five year-zero coupon bond with a face value of $1000. She…

A: Face Value = $1,000 Time Period = 5 Years Interest Rate = 10%

Q: 4. You buy a 4% 10-year $1,000 face value bond for $1,148.14. A year later, you sell the bond for…

A: The rate of return on the bond is calculated as sum of coupon yield and the capital gain yield

Q: The bank offers to sell you a bond for 585.43. No payment will be made until the bond matures 10…

A: Working note:

Q: what is the principal amount to be repaid at the end of ten years? Show your work.

A: Price of the bond is the PV of all future coupons and par value discounted at the YTM. By…

Q: What would you pay for a $225,000 debenture bond that matures in 15 years and pays $11,250 a year in…

A: Maximum that can pay : As debenture bond will provide the $11,250 every year as interest and…

Q: If you had two investments to choose from, one a perpetuity that pays $100/year forever, or the…

A: Alternative 1: Perpetuity that pays $100/year forever Alternative 2: Bond that pays interest of…

Q: ou win the Console Lottery. They payoff is a growing “console” bond. That means that the bond will…

A: We can determine the PV of the console bond using the PV of perpetual growth formula as below: PV =…

Q: You want to buy a 9 year bond with a maturity value of $3,000, and you wish to get a return of 5.5%…

A: Using excel PV function

Q: The bond will pay you $100 at the end of each year for three years. At the end of the third year,…

A: Present value (PV) is the current value of a future sum of money or stream of cash flows given a…

Q: This morning, Alicia bought a ten-year 9% coupon bond that pays interest annually. She paid $994 for…

A: Interest = Principal x rate x time

Q: A corporation issues a bond that promises to pay you monthly coupons in the amount of $ 77.5 per…

A: Bond price refers to the market value at which a bond is traded. It represents the present value of…

Q: Riley purchased a bond for 900 5 years ago. The bond rate is 2 percent and the face value is 1,000.…

A: Given, Number of years = 5 Bond rate = 2% Face value = 1,000 Rate = 1%

Q: A bond promises to you 7000 in 10 years.  If you are able to earn 6 percent on securities of equal…

A: Future Value = 7000 N = 10 Rate = 6%

Q: Imagine that a $10,000 ten-year bond was issued at an interest rate of 6%. You are thinking about…

A: Using excel PV function to calculate the amount you will be willing to pay for this bond.

Q: What is the yield to maturity for this bond? Assume the yield to maturity remains constant over the…

A: Bond valuation aims to ascertain the intrinsic worth of the bond. It entails determining the present…

Q: If Rafael wants to earn $1300 from his bond investments—all 5-year bonds with a 4.2% annual payout…

A: Using excel PV function

Q: You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it…

A:

Q: You are considering purchasing a 30-year bond for $1500. If the coupon rate is 5.7% APR paid…

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

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

A: Bond valuation is the process of finding the fair value of the bond. Fair value means the present…

Q: Two years ago (i.e., in November 2018), you purchased a newly-issued 30-year Treasury bond with a…

A: To determine the Price of Treasury Bond on November 2020.

Q: Eren purchased a bond, costing 890, three years ago, with a current price of 925. This bond paid 100…

A: Price of bond =Present value of  value after 4 years +Present value of coupon payment.

Q: The bond is selling at $160, maturing in 4 years with a face value of $200. the alternative choice…

A: Selling Price of Bond = 160 T = 4 years Face Value = 200   Interest Rate = 6%

Q: 6) You buy a 5-year bond that pays a $4 coupon each year for five years (first coupon paid the end…

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

Q: A $1,000 bond has a coupon of 5 percent and matures after twelve years. Assume that the bond pays…

A: Price of the bond can be determined by accumulating the present value of the coupon payments and the…

Q: Ten years ago your grandfather purchased for you a 25-year $1,000 bond with a coupon rate of 9…

A: Market price of bond is based on present value of periodic interest and maturity amount discounted…

Q: Showing your calculations, calculate the price of a $100,000 debenture bond that matures in 15…

A: The price of an asset is computed as the present value of the future cash flows associated with the…

Q: You are considering a savings bond that will pay $100 in 8 years. If the interest rate is 2.2%, what…

A: The objective of this question is to find out the present value of a savings bond that will pay $100…

Q: You own a bond that will pay $103, 6 years from today, and $211, 8 years from today. Your discount…

A: Present Value is a capital budgeting technique which helps in knowing the current value of future…

Q: You purchased a bond at a price of $2,100. In 30 years when the bond matures, the bond will be worth…

A: Rate of return is amount of profit earned on investment based on initial investment.Purchase price…

Q: You purchased a bond at a price of $1,400. In 25 years when the bond matures, the bond will be worth…

A: Sure, here's the calculation presented in a clear format:Calculate Total Return:Ending Value (Value…

Q: Jerry has an opportunity to buy a bond with a face value of $10,000 and a coupon rate of 14…

A: The IRR is used to evaluate the profitability of a potential investment in terms of the returns from…

Q: 4.   You bought a 10-year, 5% coupon bond for $1,000 and sold it 1 year later for $1,100. What is…

A: The holding period rate of return would be calculated by using the following formula:Rate of…

Q: If you want to receive $500 every three months for 10 years by investing in a bond that has a face…

A: The Bond's current price is the present value of its expected future cash flow, which is discounted…

Q: Exactly 7 years ago, you bought a $1,000 par value paying 9.0% coupons on a semiannual basis for…

A: Here,Purchase Price of Bond is $1,076.95Coupon Rate is 9%Payment Frequency (m) is Semi Annual i.e…

Q: You purchase 6,500 bonds with a par value of $1,000 for $981 each. The bonds have a coupon rate of…

A:

Q: suppose you purchase a bond with a coupon of $50 for $1010 you sell it one  year later for $900 What…

A: In this question holding period return would be find out. HPR is a return which is earned by an…

Q: Fifteen years ago, your grandfather purchased for you a 20-year $1,000 bond with a coupon rate of 10…

A: Given information: Face or Par value (FV) = $1,000 Annual Coupon rate (CR) = 10% or 0.10 Annual…

Q: What price should you receive for the bond?.

A: A bond's price is determined by the bond's future cash flows, which include periodic interest…