34. Four years ago you bought a 25-year 8.5% $1,000 bond. The bond paysinterest each 6 months. You want to sell the bond. You just receivedthe 8h semiannual interest payment of $42.50 ($1,000 x 4.25% periodicrate = $42.50).semiannually. What is your bond worth today?Similar bonds are being issued that pay 6%

We require to calculate the present value of bond in this question. We can calculate the present…

Four years ago you bought a 25-year 8.5% $1,000 bond. The bond pays interest each 6 months. You want to sell the bond. You just received the 8th semiannual interest payment of $42.50 ($1,000 x 4.25% periodic rate = $42.50). semiannually. What is your bond worth today? Similar bonds are being issued that pay 6%

Four years ago you bought a 25-year 8.5% $1,000 bond. The bond pays interest each 6 months. You want to sell the bond. You just received the 8th semiannual interest payment of $42.50 ($1,000 x 4.25% periodic rate = $42.50). semiannually. What is your bond worth today? Similar bonds are being issued that pay 6%

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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Similar questions

John bought a 10-year bond for $925. The bond pays a coupon of 5 percent per year and payments are made semiannually. What is the Effective Annual Yield (EAY) on this bond? 10.67% 9.66% O 6.10% 6.30% 3.10%
A Bond with a face value of $15000 matures in 8 years. The bond rate of interest is 10% paid semi-annually. If you buy this bond for $12000, at what effective annual rate of interest did you receive?
A bond with a face value of $5,000 pays quarterly interest of 1.5 percent each period. Twenty-two interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 8 percent compounded quarterly on your money? Click the icon to view the table of compound interest factors for discrete compounding periods when i= 2%. You should pay $ (Round to the nearest cent as needed.)
You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it immediately after the previous owner received a semiannual interest payment. The bond rate is 6.6% per year payable semiannually. You plan to hold the bond for 3 years, selling the bond immediately after you receive the interest payment. If your desired nominal yield is 4% per year compounded semiannually, what will be your minimum selling price for the bond?
3. You bought a bond (par-$1,000) three years ago for $1,040. The bond is now selling for $990. It also paid $40 in interest per year (i.e., 4% coupon rate), which you reinvest in the bond. Calculate the realized rate of return (annualized) on this bond. Interest on this bond is paid semiannually.
You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it immediately after the previous owner received a semiannual interest payment. The bond rate is 6.6% per year payable semiannually. You plan to hold the bond for 3 years, selling the bond immediately after you receive the interest payment. If your desired nominal yield is 9% per year compounded semiannually, what will be your minimum selling price for the bond? $ 13450 Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±5.
(Bondholders' expected rate of return) Zenith Co.'s bonds mature in 8 years and pay 9 percent interest annually. If you purchase the bonds for $700, what is your expected rate of return? www Your expected rate of return is%. (Round to two decimal places.)
A bond with a face value of $7 000 pays quarterly interest of 2.5 percent each period. 22 interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 6 percent compounded quarterly on your money?
Help me please
Ten bonds are purchased for $9,598.13 and are kept for 5 years. The bond coupon rate is 7% per year, payable semiannually. Immediately following the owner's receipt of the last coupon payment, the owner sells each bond for $50 less than its par value (price discount). The owner will invest in the bonds if the effective annual yield is at least 9%.What is the face value of each bond?______
Yesterday you paid $1000 for a 6% coupon, $1000 face value 5-year bond. It is callable at the end year 1(after it makes the first year-end coupon payment) for $1100. The annual discount rate on this bond has just fallen to 2%. What will this bond be selling for today? If you had intended to hold this bond until it matured, how much money did the call provision cost you in total over all five years?

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