Carlos owns investment A and 1 bond B. The total value of his holdings is $2,496.36. Investment A is expected to pay annual cashflows to Ronish of $291.00 per year with the first annual cash flow expected later today and the last annual cash flow expected in 8years from today. Investment A has an expected return of 15.55 percent. Bond B pays semi-annual coupons, matures in 13 years, hasa face value of $1,000.00, has a coupon rate of 8.52 percent, and pays its next coupon in 6 months. What is the yield-to-maturity forbond B?4.78% (plus or minus 2 bps)3.47% (plus or minus 2 bps)9.57% (plus or minus 2 bps)5.32% (plus or minus 2 bps)none of the answers are within 2 bps of the correct answer

Price of bond is the present value of coupon payments plus present value of the par value of the…

los owns investment A and 1 bond B. The total value of his holdings is $2,496.36. Investment A is expected to pay annual cash flows to Ronish of $291.00 per year with the first annual cash flow expected later today and the last annual cash flow expected in years from today. Investment A has an expected return 15.55 percent. Bond B pays semi-annual coupons, matures in 13 years a face value of $1,000.00, has a coupon rate of 8.52 percent, and pays its next coupon in 6 months. What is the yield-to-maturity f bond B? O 4.78% (plus or minus 2 bps) O 3.47% (plus or minus 2 bps) O 9.57% (plus or minus 2 bps) O 5.32% (plus or minus 2 bps) O none of the answers are within 2 bps of the correct answer

los owns investment A and 1 bond B. The total value of his holdings is $2,496.36. Investment A is expected to pay annual cash flows to Ronish of $291.00 per year with the first annual cash flow expected later today and the last annual cash flow expected in years from today. Investment A has an expected return 15.55 percent. Bond B pays semi-annual coupons, matures in 13 years a face value of $1,000.00, has a coupon rate of 8.52 percent, and pays its next coupon in 6 months. What is the yield-to-maturity f bond B? O 4.78% (plus or minus 2 bps) O 3.47% (plus or minus 2 bps) O 9.57% (plus or minus 2 bps) O 5.32% (plus or minus 2 bps) O none of the answers are within 2 bps of the correct answer

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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Janice V. bought a 5% $1000 twenty-year bond for $925. She received a semiannual dividend for 8 years, then sold it immediately after the 16th dividend for $800. What rate of return did she make (a) per semiannual period, and (b) per year (nominal)?
Mr. Yap bought a bond having a face value of Php 1,000.00 for Php 970.00. The bond rate was 14% nominal and dividends were made to him semiannually for a total of 7 years. At the end of the seventh year, he sold the bond to a friend at a price that resulted a yield of 16% nominal on his investment. What was the selling price
Assume that Peter purchased a 25-year, 7.24 percent coupon (annual payments) bond at par ($1,000). He sold the bond after 4 years for $1,095.55. He reinvested the coupon payments at the 4.75 percent compounded annually. Calculate the bond's total yield.
On January 1 of this year, Diego Corporation sold bonds with a face value of $530,000 and a coupon rate of 5 percent. The bonds mature in 10 years and pay interest annually on December 31. Diego uses the effective-interest amortization method. Ignore any tax effects. Each case is independent of the other cases. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. Required:1. Complete the following table. The interest rates provided are the annual market rate of interest on the date the bonds were issued. Case A (5 percent) Case B (7 percent) Case C (4 percent) a. Cash received at issuance b. Interest expense recorded in Year 1 c. Cash paid for interest in Year 1 d. Cash paid at maturity for bond principal
Four years ago, Sandra Stills bought six-year, 5.5 percent coupon bonds issued by the Oriole Corp. for $944.99. If she sells these bonds at the current price of $892.26, what will be her realized yield on the bonds? Assume similar coupon-paying bonds make annual coupon payments. Assume face value is $1,000. (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal places, e.g. 15.25%.) Realised rate of return %
Vic Zaloom bought a corporate bond from IBEM Corporation for $100,000. The face value of the bond is $100,000 and will mature in twenty years. A $2,500 dividend is expected to be paid every quarter. If Vic plans to keep the bond until maturity, determine the effective rate of return he is getting on this investment. A. 10.38% B. 10.00% C. 12% D. 9.15%
Sara owns one bond A and one bond B. The total value of these two bonds is $1,860.00. Bond A pays semi-annual coupons, matures in 12 years, has a face value of $1,000.00, and pays its next coupon in 6 months. Bond B pays annual coupons, matures in 3 years, has a face value of $1,000.00, has a yield-to- maturity of 10.64 percent, and pays its next coupon in one year. Both bonds have a coupon rate of 9.30 percent. What is the yield-to-maturity for bond A? O 10.54% (plus or minus 2 bps) O 10.92% (plus or minus 2 bps) O 5.92% (plus or minus 2 bps) O 8.87% (plus or minus 2 bps) O none of the answers are within 2 bps of the correct answer
Isabel prefers to purchase bonds that contain a sinking fund provision to protect her from any potential loss of her invested capital. She purchased a 20-year, $20,000 sinking fund bond with a 12% coupon, paid seml-annually, for $18,900. If the company calls the bond after 10 years, and the call penaity requires a payment of $30 per $1,000 of face value, what are the yeilds to maturity and yeild to call on this bond? -previous answered questions were wrong, show calculations.

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