Answered: n What is the yield to maturity on a…

n What is the yield to maturity on a 3-year, $1,000 discount bond with a current price of $921? Yield to maturity = percent. (Round your response to one decimal places.)

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter29: Interest, Rent, And Profit

Section: Chapter Questions

Problem 1WNG

See similar textbooks

Related questions

Q: Consider a bond with a 7% annual coupon and a face value of $900. Complete the following table.…

A: The price of a bond is determined by several factors, including its years to maturity, yield to…

Q: maturity? What would be the yield if the price were $1044.89 instead?

A: Yield to maturity (YTM) is the total rate of return that will have been earned by a bond when it…

Q: Assume that a bond has a face value of $250,000. It has a maturity of 1 year and the coupon rate of…

A: Here we calculate the yield maturity by using the given information , so calculation as follow-

Q: Consider a coupon bond that has a $1.000 par value and a coupon rate of 9%. The bond is currently…

A: Bonds are debt instruments issued by companies. Zero-coupon bonds are the bonds that are issued at a…

Q: Suppose a 10-year, $1,000 bond with a(n) 11% coupon rate and semiannual coupons is trading for a…

A: To calculate the bond's yield to maturity (YTM) and its price when the YTM changes, we can use the…

Q: Consider a coupon bond that has a par value of $1,000 and a coupon rate of 8%. The bond is currently…

A: Yield to maturity (YTM) is the total rate of return that will have been earned by a bond when it…

Q: Suppose a ten-year, $1,000 bond with an 8.9% coupon rate and semiannual coupons is trading for…

A: here we calculate bond yield to maturity by using the given information which are as follow-

Q: Determine the current yield on a bond with a $200 annual interest repayment as well as a $1,550…

A: Bonds are a type of debt instrument that stand in for loans given to the issuer. Bonds are a…

Q: If the interest rate is 10%, what is the present value of a security that pays you $1100 next year,…

A: Present value (PV) is the present or current value of a future sum of stream of cash flows given a…

Q: Calculate the price of a zero-coupon bond that matures in 20 years if the market interest rate is…

A: We know that, The Price of a zero coupon bond = F / (1+i)n Where, F = Face value, i = Rate or yield…

Q: Complete the following table.

A: The price of a bond is determined by several factors, including its years to maturity, yield to…

Q: Calculate the present value of a $1,300 discount bondwith seven years to maturity if the yield to…

A: Formula for calculating present value is shown below. Present value = Future value / (1 + interest…

Q: f a coupon bond has two years to maturity, a coupon rate of 8%, a par value of $1000, and a…

A: Answer: Given, Coupon rate = 8% Par value = $1000 Yield to maturity = 12% Calculation:…

Q: A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon…

A: Face Value (FV)= $1000 Coupon Value(C) = $1000*8% = $80/2= $40 Time(n) = 30yrs Number of…

Q: What is the yield to maturity on a $10,000-face-valuediscount bond, maturing in one year, which…

A: Bond discount is the sum by which the market cost of a security is lower than its chief sum due at…

Q: What is the price of a two year bond with a 9% annual coupon and a yield to maturity of 8%?

A: Given Information : Annual Coupon (C) = 9% Yield to maturity (YTM) = 8% Assume Face value of Bond =…

Q: What is the yield to maturity (YTM) on a simple loan for $1,000 that requires a repayment of $2,000…

A: Here we calculate the yield to Maturity by using the future amount repaid so the calculation of the…

Q: What is the present value of $400 to be paid in three years if the interest rate is 20%? PV =…

A: Present worth is the current worth of the future sum of money, at a particular rate of return. The…

Q: Suppose you purchase a $10,000 face value zero-coupon bond and hold it to maturity, a term of 10…

A: Face value = 10000 $ Time = 10 Years Current price = 8072 YTM = (10000 / 8072)^1/10 – 1 * 100 = 2.16…

Q: What is the current price of a $1,000 discount bond that matures in 5 years if the yield to maturity…

A: As it is given in the question that Time n=5 YTMR = 5% current price =$1,000

Q: Define the term Yield to Maturity?

A: Yield to maturity (YTM) is a rate of return of a bond or debenture if it held till its maturity date…

Q: Consider a U.S. Treasury Bill with 270 days to maturity. The face value is $100. If the annual yield…

A: The treasury bills are the government securities which can be easily converted into their liquid…

Q: Calculate the present value (price) of a discount bond with face value of $100, maturity of 5 years…

A: Given : Yield to maturity = r =5% = 0.05 per year A = 100 t = 5 n = 1 (per year) Formula used: P =…

Q: Eileen buys a perpetuity-immediate with annual payments for a purchase price of X. The first payment…

A: Eileen buys a perpetuity-immediate with annual payments for a purchase price of X. The first payment…

Q: A 12 percent semiannual coupon bond matures in 9 years. The bond has a face value of $1,000 and a…

A: The yield to maturity (YTM) of a bond is the total return when held to maturity. A long-term bond's…

Q: 1. What is the present value of $500.00 to be paid in two years if the annual interest rate is 5%?…

A: Since you have asked multiple question, we will solve the first question for you. If youwant any…

Q: Ex: Consider a discount bond that has a 1000 TL face value. Current price of the bond is 900 TL and…

A: Yield to maturity (YTM) is the internal rate of return (IRR) of an investment in a bond if the…

Q: What is the yield to maturity on a simple loan for $5 million that requires a repayment of $9…

A: Yield to maturity is close to the current yield in that it divides annual cash inflows from a bond…

Q: The yield to maturity of a one-year, risk-free, zero-coupon bond with a $10,000 face value and a…

A: Given Bond face value = 10,000 $ Current price = 8063 $

Q: What is the price, current yield and YTM? What is the market interest rate drops to 4% right after…

A: This question is about bond valuation and the relationship between bond prices, interest rates, and…

Q: Calculate the current yield on a bond that has an annual interest payment of $200 and a resale price…

A: Bond: It is an instrument of indebtedness of the bond issuer to the bondholder.

Q: A corporate bond pays 6% of its face value once per year. If this $10,000 10-year bond sells now for…

A: Yield to maturity (YTM): The yield to maturity (YTM) of a bond is the total return expected if the…

Question

arr
n.
What is the yield to maturity on a 3-year, $1,000 discount bond with a current price of $921?
Yield to maturity =
percent. (Round your response to one decimal places.)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Why are bonds somewhat risky to buy, even though they make predetermined payments based on a fixed rate of interest?
Calculate the present value of a $1,300 discount bond with 6 years to maturity if the yield to maturity is 5%. The present value is $ (Round your response to two decimal places.)
f a coupon bond has two years to maturity, a coupon rate of 8%, a par value of $1000, and a yield to maturity of 12%, then the coupon bond will sell for $ ? (Round your response to the nearest two decimal place) What will the coupon bond sell for?
Thank You!
Question 17 The yield to maturity of a one-year, risk-free, zero-coupon bond with a $10,000 face value and a price of $8,063 when released is %. (round your answer to two decimal places)
A 12 percent semiannual coupon bond matures in 9 years. The bond has a face value of $1,000 and a current yield (CY) of 11.62 percent. What is the bond’s yield to maturity (YTM)? how would I calculate in a BA II PLUS FINANCIAL CALCULATOR. 4
Define the term Yield to Maturity?
What is the current price of a $1,000 discount bond that matures in 5 years if the yield to maturity on that bond is 5%? Show your work!
Ex: Consider a discount bond that has a 1000 TL face value. Current price of the bond is 900 TL and the bond has two years to maturity. What is the yield to maturity for this bond?
1. What is the present value of $500.00 to be paid in two years if the annual interest rate is 5%? $___ 2. The current interest rate on a 10-year treasury note (with face value = $100 and annual coupon rate = 2.625%) is 3.37%. The buyer of this note will receive $ ____ payment from the treasury every year before maturity while holding the bond.
Assume that a bond has a face value of $250,000. It has a maturity of 1 year and the coupon rate of interest is 5%. If the current market price of this bond is $225,000, what is the yield to maturity? If the market price of the bond increases to $240,000, what happens to the yield to maturity?
Consider a bond with a 7% annual coupon and a face value of $900. Complete the following table. (Enter your responses rounded to two decimal places.) Years to Maturity 334 66 Current Yield to Maturity Price 5% 7% 7% 5% 9% SAGA CAS S