Loïc is planning to purchase a Treasury bond paying a (2) coupon rate of 2.57% p.a. The face value of the bond is $100. Its maturity date is 15 March 2033; the bond matures at par. If Loïc purchased this bond on 5 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 12.41% p.a., compounded half-yearly. Loic needs to pay 32.3% of coupon payments and capital gains in tax. Assume that all tax payments are delayed by a half- year. O a. $28.5602 O b. $38.3864 O c. $27.6087 O d. $26.7505

Loïc is planning to purchase a Treasury bond paying a (2) coupon rate of 2.57% p.a. The face value of the bond is $100. Its maturity date is 15 March 2033; the bond matures at par. If Loïc purchased this bond on 5 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 12.41% p.a., compounded half-yearly. Loic needs to pay 32.3% of coupon payments and capital gains in tax. Assume that all tax payments are delayed by a half- year. O a. $28.5602 O b. $38.3864 O c. $27.6087 O d. $26.7505

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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Krishna buys an -year 1000 bond at par. The Macaulay duration is 7.959 years using an annual effective interest rate of 7.2%. Calculate the estimated price of the bond, using the first-order modified approximation, if the interest rate rises to 8.0%.
Henry is planning to purchase a Treasury bond with a coupon rate of 2.26% and face value of $100. The maturity date of the bond is 15 March 2033. (b) If Henry purchased this bond on 3 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.11% p.a. compounded half-yearly. Henry needs to pay 28.2% on coupon payment as tax payment and tax are paid immediately. a. 84.9188 O b. 84.1098 c. 84.9203 ○ d. 85.4177
Today is 1 July, 2022, Georg plans to purchase a corporate bond with a coupon rate of j2 = 1.69% p.a. and a face value of $100. This corporate bond matures at par. Its maturity date is 1 January, 2025. The yield rate is assumed to be j2 = 10.9% p.a. Assume that this corporate bond has a 6% chance of default in any six-month period during its term. Assume, also, that, if default occurs, Georg will receive no further payments at all. Calculate Georg's purchase price. Round your answer to three decimal places. Answer a. $59.319 b. $81.541 c. $80.092 d. $53.631
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am. 123.
Kevin owns a bond that has a face value of $1,000, a remaining maturity of 8 years and a current market price of $1,056.50. If Kevin believes that his bond has a yield to maturity of 6.28%, then what must be the annual Coupon PMT of Kevin’s bond?
Herry is planning to purchase a Treasury bond with a coupon rate of 2.67% and face value of $100. The maturity date of the bond is 15 March 2033. (d) If Henry purchased this bond on 7 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.31% p.a. compounded half-yearly. Henry needs to pay 27.8% on coupon payment and capital gain as tax payment. Assume that all tax payments are delayed by half year. Question 4Answer a. 83.6029 b. 68.6929 c. 82.4233 d. 94.5242
Loïc is planning to purchase a Treasury bond paying a (j2) coupon rate of 4.94% p.a. The face value of the bond is $100. Its maturity date is 15 March 2033; the bond matures at par. If Loïc purchased this bond on 8 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 9.32% p.a., compounded half-yearly. Loïc needs to pay 11.1% of coupon payments and capital gains in tax. Assume that all tax payments are delayed by a half-year.
Assume that Jack Tan wishes to purchase a bond with a 10-year maturity, an annual coupon rate of 10%, a face value of RM1,000, and pay interest payments every six If Jack Tan requires a 12% nominal yield to maturity on this investment, compute the maximum price he should be willing to pay for the bond.
Carol plans to invest in a 12 year bond issued by Iris Ltd that pays a coupon of 4.8 percent. Coupon payments are made semi-annually. If the current market rate is 6.4 percent, what is the maximum amount Carol should be willing to pay for this bond? Assume it has a par value of $1000.
You bought a newly issued 10-year, $1,000 par value, 5.50% coupon bond (with semiannual coupon payments) on May 1, 2023. You decided to check the value and yields on the bond annually, so that you can keep track of your wealth. Your first check was to be done on May 1, 2024. On April 15, 2024, the yield to maturity for the bond changed to 5.20%. For your one year anniversary of owning the bond, calculate the bond's total yield for the first year of ownership. Report the percentage to two decimal places (3.126% = 3.13).
mark is planning to purchase an Australian Treasury bond with a coupon rate (j2) of 1.04% and face value of $100. The maturity date of the bond is 15 May 2033. Markbond matures at par. If Markpurchased this bond on 2 May 2018, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.26% p.a. compounded half-yearly, allowing for taxation. Mark needs to pay tax at rate 21.7% on coupon payments. Assume the tax on coupon is paid immediately on the coupon payment date. а. $71.4907 b. $71.4921 С. $72.2427 d. $71.0840

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