If you had two investments to choose from, one a perpetuity that pays $100/year forever, or the other, a bond that pays interest of $100/year for 30 years, then pays back the $1000 principal, which one would you choose?

Q: The US Govermment wanted to auction $600 million worth of 1-year Treasury Bills. Bids for $100…

A:

Q: when you initially purchased it? assuming the bond earned 3.97 percent annually, approximately how…

A: EEBonds are issued by government and these bonds are issued at half cost and will double in prices…

Q: The amount of the prospective investor pay for a bond if he desires an 13% return on his investment…

A: Redemption amount (R) = P 40000 Annual interest (A) = P 1200 n = 20 years r = 13%

Q: 6.3 percent 18.8 percent

A: Yield of perpetual bond can be calculated from interest rate and price of bond.

Q: 9 Weatherhead Bakery is issuing a bond with 10 year maturity and annual coupon payments of $80. The…

A: A bond is a debt instrument where a loan (in the form of bond price) is received by a company, which…

Q: Suppose the government decides to issue a new savings bond that is guaranteed to double in value if…

A: Present value of Annuity The future cash flow is discounted to determine the present value of an…

Q: A Treasury bond that you own at the beginning of the year is worth $1,020. During the year, it pays…

A: Dollar return = Ending value + interest - beginning value Dollar return = $1,030 + 32 - $1,020…

Q: You have discovered that when the required rate of return on a bond you own fell by 0.5 percent from…

A: A bond is a kind of debt security issued by the government and private companies to the public for…

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: You consider purchasing bonds today. There are three future time periods, t = 1, 2, 3, where bonds…

A: Arbitrage is the simulataneous purchase and sale of an asset in different markets to exploit tiny…

Q: se the following tables to calculate the present value of a $315,000 @ 6%, 5-year bond that pays…

A: The present value of the bond is the future inflows from bonds discounted at the market rate of…

Q: 3. You have the option of investing money in a bond that will help to grow your money. Bond A offers…

A: Effective annual rate is the interest actually earned on the investment or paid on the loan, as a…

Q: I already ask this but I whant know how you do the calculation, please could you show me all the…

A: Calculating the price of bond if interest rate on the bond is 10%. We have,Price of bond = C [1- (1…

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: Use the following tables to calculate the present value of a $774,000 @ 6%, 5-year bond that pays…

A: Lets understand the basics. For calculating present value of bond, we need to use below formula. =…

Q: Imagine a market where two bonds are traded. Both have a face value of $1,000 and a single annual…

A: To construct zero-coupon bonds using the given coupon bonds, we'll use a concept known as bond…

Q: Chuck's of Czechia is selling a perpetual bong that will provide the bondholder with a $50 / year…

A: Perpetual Bond is a bond with no maturity period of the bond and hence no redemption value. In such…

Q: Lantech investor is deciding between two bonds:  Bond A pay $72 annual interest and has a market…

A: Since you have asked multiple sub parts in the question, I will address the first three sub parts.…

Q: You can invest in taxable bonds that are paying a yield of 9.4 percent or a municipal bond paying a…

A: A financial instrument that does not affect the ownership of the common shareholders or management…

Q: How much did an old $14,800 EE savings bond cost when you initially purchased it? Assuming the bond…

A: NPER is a function commonly used in  Excel. The NPER function is used to calculate the number of…

Q: a. Compute the bond's expected rate of return. b. Determine the value of the bond to you, given your…

A: a)Calculating Expected Return,Using TVM Calculation,I = [PV = -825, FV = 1,000, PMT = 80, N = 10]I =…

Q: ppose in the question above, the tuition obligations have a Macaulay duration of 4.35 in years, and…

A: Duration of the bond shows the weighted period of the bond required to recover the all cash flow…

Q: Realized rate of return

A: Realised rate of return is the return % generated from the bond. This can be computed with the excel…

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: Assume you have the following asset and liability in your balance sheet Asset - Bond A Modified…

A: The answer is stated below:

Q: You have an opportunity to purchase a bond that will pay out $815 in 10 months. If you would like…

A: Payout in 10 months = $ 815 Interest rate = 2.2% Period = 10 months

Q: 9. The face value of a bond is $3000.00. The firm offering the bond pays 1% of the sales price to…

A: Hi, Thanks for posting the questions. As per our Q&A guidelines, the first question should be…

Q: (Bond valuation) You own a bond that pays $120 in annual interest, with a $1.000 par value. It…

A: Given: Annual interest 120 Par value 1000 Years 20 Yield to maturity 11%

Q: A bond with 11 years to maturity has an annual interest payment of $50. If the bond sells for its…

A: Current yield represents the return earned on a bond in a year. Current yield is expressed in…

Q: A $7100 bond bearing interest at 3.5% payable semi-annually is due in 8 years. Money is worth 6.9%…

A: A bond is a kind of debt security issued by the government and private companies to the public for…

Q: e for a 4-year bond st rate on the 12 yea

A: The interest rate can be computed as follows :

Q: Consider the following: today's interest rate for a 15-year bond is 8%; today's interest rate for a…

A: The interest rate for bonds with comparable maturities and risk levels can be obtained through…

Q: If you wanted to achieve a 7% return on this bond ($10,000 face value, payable in 10 years), with a…

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

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: Suppose the government decides to issue a new savings bond that is guaranteed to double in value if…

A: Present value of annuity is the current value of the future payments that are calculated using the…

Q: What total cash will you receive from the bond after the 3 years? Assume that periodic cash flows…

A: The Question asked about what will the total price, received after 3 years when a person who buys it…

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 $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: The value of a consol bond is given by the formula below: ??=?/(1+?)+?/(1+?)2+?/(1+?)3+⋯ Show that…

A: Since perpetual or consol bond payments are comparable to stock dividend payments in that they both…

Q: Suppose the U.S. Treasury offers to sell you a bond for $2,000. No payments will be made until the…

A: Bond is type of debt security which carries fixed return as interest. It can be redeem after the…

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: Latasha would like to invest a certain amount of money for three years and considers investing in…

A: The question is based on the concept of interest rate term structure by use of pure expectation…

Q: Consider a one-year discount bond that has a present value of P1,500. If the rate of discount is 4…

A: Solution: Present value of bond = P1,500 Discount rate = 4% Period = 1 year

Q: Nick would like to invest a certain amount of money for two years and considers investing in a…

A: Here, Strategy A: Buy a one year bond that pays 5% and in year one, then buy another one year bond…