Please correct answer and don't use hand rating KThe yield to maturity on a 10-year Treasury note (with face value $100 and annual coupon rate = 2.625 %) is 3.37%. If the price of this Treasury note goes up, its:I. coupon rate drops below 2.625%.II. coupon rate rises above 2.625%.III. yield to maturity drops below 3.37%.IV. yield to maturity rises above 3.37%.OA. III.OOCB. IV.C. I and III.OD. II and IV.O E. 1.

The issue at hand concerns the connection between the coupon rate, yield to maturity, and the price…

Answered: K The yield to maturity on a 10-year…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 10P

See similar textbooks

Similar questions

A Treasury note has 2 years left to maturity, a $1,000 face value, and a coupon rate of 4.4%, with annually (in $) paid coupon. Suppose this Treasury note is currently traded in the market at $970, what is the yield to maturity?
What is the discount yield, bond equivalent yield, and effective annual return on a $1 million Treasury bill that currently sells at 93.375 percent of its face value and is 70 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your percentage answers to 3 decimal places. (e.g., 32.161)) Discount yield Bond equivalent yield Effective annual return % % %
1. The interest rate is 8.7% p.a. effective and the rate of inflation is 1% p.a. Compute the real rate of interest 数字 % Enter a percentage correct to 2 decimal places. 2. A Zero-Coupon Bond, with face value £100, that reaches maturity in 5 years sells for £75. The inflation rate is 1% p.a. effective. What is the real yield? 数字 % Enter a percentage correct to 2 decimal places.
FYI bonds pay $40 in interest every six months and will mature in 10 years. a. Calculate the price if the yield to maturity on the bonds is 7, 8, and 9 percent, respectively. b. Explain the impact on price if the required rate of return decreases.
1. The interest rate is 9.5% p.a. effective and the rate of inflation is 5.2% p.a. Compute the real rate of interest % Enter a percentage correct to 2 decimal places. 2. A Zero-Coupon Bond, with face value £100, that reaches maturity in 7 years sells for £66. The inflation rate is 5% p.a. effective. What is the real yield? % Enter a percentage correct to 2 decimal places.
AT - bill with face value $10,000 and 89 days to maturity is selling at a bank discount ask yield of 3.6%. Required: a. What is the price of the bill? (Use 360 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is its bond equivalent yield? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places.)
The real risk-free rate is 3 percent. Inflation is expected to be 3.5 percent this year, 5 percent next year, and 6 percent thereafter. The maturity risk premium is estimated to be 0.11 ´ (t - 1)%, where t is the number of years to maturity. What is the yield on a 7-year Treasury note? a. 9.66% b. 8.50% c. 0.77% d. 9.16% e. 7.16%
A Treasury STRIPS matures in 7 years and has a yield to maturity of 9.4 percent. Assume the par value is $100,000. a. What is the price of the STRIPS? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the quoted price? (Do not round intermediate calculations. Round your answer to 3 decimal places.)
What is the discount yield, bond equivalent yield, and effective annual return on a $2 million commercial paper issue that currently sells at 97.50 percent of its face value and is 123 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your percentage answers to 3 decimal places. (e.g., 32.161)) Discount yield Bond equivalent yield Effective annual return % % %
Consider a 1-year treasury bill that currently earns 3.25%. The increase in rates for the above bill is shown as follows: Year Increase in rate 1 year from now 3.6% 2 years from now 3.85% The liquidity premium is as follows: 2-year securities 3-year securities 0.07% 0.15% Assume that if the liquidity premium theory is correct. Calculate the current rate on 3-year Treasury securities.
AT - Bill that is 225 days from maturity is selling for $98, 850. The T. Bill has a face - value of $ 100,000 (LG 5 - 2) Calculate the Discount Yield on the T. Bill. Calculate the Bond Equivalent Yield on the T Bill. Calculate the EAR (Equivalent Annual Return) on the T. Bill. What would the Bond Equivalent Yield be, if all other factors remain the same, but the T. bill has a maturity of 300 days. B
Consider a bond with a modified duration (in years) of 3.2. Coupon rate and yield to maturity are the same. Par value is $1,000. Estimate the percentage change in price for a 200 basis-point increase in interest rates. O A. -5.4% ОВ. -6.4% C. -8.6% OD. 4.8%

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS