Martha bought a 20-year bond at inception at face value of $11,000.00. She held it for 10 years, collecting the yearly coupons of 4.67% bond rate selling at maturity, obtaining a yield of 7.16%. Carmen bought the bond from Martha, which she holds until maturity. What is the expected yield for Carmen?

Martha bought a 20-year bond at inception at face value of $11,000.00. She held it for 10 years, collecting the yearly coupons of 4.67% bond rate selling at maturity, obtaining a yield of 7.16%. Carmen bought the bond from Martha, which she holds until maturity. What is the expected yield for Carmen?

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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Jacob purchased a bond for $880 with a 9% coupon. He sold the bond after one year when it was paying him a current yield of 10%. What is the holding period return? 9.0% 9.5% 10.0% 11.0% 12.5%
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Lydia just purchased a Treasury bond for $101.68 at a yield rate of j2=6.94% p.a. The duration of Lydia's bond is 3.0639 years. Using the bond price sensitivity formula, calculate the change in price of Lydia's bond that would result from an increase in the yield rate (2) of 49 basis points. Round your answer to four decimal places. (The values below are all in dollars.) a. -0.7377 O b. -0.7137 O c. -1.4275 d. -1.4753
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%
(6) Maureen purchased a laddered portfolio of par-value bonds with semiannual coupons for $20,918. The bonds had common face amount X and coupon rate 6.8%. There was one bond redeemable at the end of each year for ten years. Maureen's yield on the portfolio was an annual effective rate of 8%. Find X.
Last year, Sally purchased a $1,000 face value corporate bond with an 11.2 percent annual coupon rate and a 12-year maturity. At the time of the purchase, it had an expected yield to maturity of 11.9 percent. If Sally sold the bond today for $949.88, what rate of return would she have earned for the past year? a. 11.02% b. 11.20% c. 11.10% d. –0.69% e. 10.51%
Five years ago, John bought the ABC $1,000 9% 15-year bond. The bond could be called four years from today, at $1090. If the bond is called six years from today, it will be called at $1,080. Currently, the bonds are selling for $1,065. If John buys the bond today, and the bonds are called 4 years from today, what is John’s yield to call? If the bonds are not called at all, what is the Yield to Maturity? Only typing answer Please answer explaining in detail step by step without table and graph thankyou
4 yrs ago, Mrs. Horn bought 6-yr, 5.7% coupon bonds issued by CPFCU for $955.36. If she sells these bonds at the current price of $892.86, what will be her realized yield on the bonds? Assuming similar coupon-paying bonds make annual coupon pymts. (round intermediate calculations to 5 decimal places & final answer to 2 decimal places) Realized rate of return _______%
2. An investor buys a 10 year $10,000, 8% coupon, semiannual pay bond for $9,100. He sells it three years later, just after receiving the sixth coupon payment, when its yield to maturity is 5.6%. What would be the bond price at the time of sale?
Wing Sze buys a $1,000.00 bond maturing in 19 years with a 1.500% coupon. The bond is priced to yield 7.250% compounded weekly. How much does she pay? a.P = $420.61. b.P = $355.90. c.P = $432.75. d.P = $368.04. e.P = $404.44.

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