On March 10, 2022, you purchase a $25,000 corporate bond that matures on January 15, 2030 (settlement occurs on March 12, 2022). The bond has a coupon rate of 3.25% and is quoted at 98:16 (98.5% of face value). The last coupon payment was on January 15, 2022 (56 days before settlement), and the next coupon payment will be on July 15, 2022 (125 days from settlement). Calculate the dirty price of this transaction
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- Consider an investor who, on January 1, 2022, purchases a TIPS bond with an original principal of $111,000, an 10 percent annual (or 5 percent semiannual) coupon rate, and 15 years to maturity. a. If the semiannual inflation rate during the first six months is 0.5 percent, calculate the principal amount used to determine the first coupon payment and the first coupon payment (paid on June 30, 2022). b. From your answer to part a, calculate the inflation-adjusted principal at the beginning of the second six months. c. Suppose that the semiannual inflation rate for the second six-month period is 1.3 percent. Calculate the inflation-adjusted principal at the end of the second six months (on December 31, 2022) and the coupon payment to the investor for the second six-month period. (For all requirements, round your answers to 2 decimal places. (e.g., 32.16)) a. Principal amount Coupon payment b. Inflation-adjusted principal c. Inflation-adjusted principal at the end of the second six months…am. 69.A bond is issued on June 3, 2020. Maturity date is June 3, 2023. First semi-annual coupon payment is on December 3, 2020. The interest rate (per annum) is 0.4%. The face value is $1,000,000 (in thousands). The price of the bond is 998.60 (per $1000). 1) Determine the amount of each coupon payment per $1,000 of face value and the total number of coupon payments. 2) Calculate the yield to maturity. 3) Calculate the new price per $1,000 of face value if the yield to maturity increased by one percentage point (e.g., from 1.5% to 2.5%) immediately after issuance. Also calculate the percentage price change.
- A 4.35% coupon bond is priced at 99.68. The last semi-annual coupon payment was made on June 3, 2019. The next coupon will be paid on December 1, 2019. What is the invoice price on July 6, 2019? a) $1014.58 b) $1003.97 c) $1018.55 d) $1000.77Consider an investor who, on January 1, 2022, purchases a TIPS bond with an original principal of $100,000, an 8 percent annual (or 4 percent semiannual) coupon rate, and 10 years to maturity. If the semiannual inflation rate during the first six months is 0.3 percent, calculate the principal amount used to determine the first coupon payment and the first coupon payment (paid on June 30, 2022). From your answer to part a, calculate the inflation-adjusted principal at the beginning of the second six months. Suppose that the semiannual inflation rate for the second six-month period is 1 percent. Calculate the inflation-adjusted principal at the end of the second six months (on December 31, 2022) and the coupon payment to the investor for the second six-month period.A bank has issued a bond on April 1st 2020 which pays coupons at a rate of 3% of the nominal value twice a year in arrears. Coupon payments are due on 1st April and Ist October and the bond is redeemable at 110% of nominal on Ist September 2030. (a) An investor purchases the bond on 1st March 2021. Show that the price of the bond is approximately £76 per £100 nominal assuming a gross redemption yield of 7%. (b) The investor pays income tax at 40%. In addition, assume that the inflation rate is constant at 1.5%. Calculate the investor's net real rate of return assuming she holds the bond until maturity. State any approximations made.
- TreeTop Inc. bonds was issued on Oct 15th, 2010. The bonds have a coupon rate of 6.2%, with interest paid annually. The par value of the bonds is $1,000 and the maturity is Oct 15th, 2042. If the market price of one contract of TreeTop bond on Oct 15th, 2020 is $1,105, what is the annual interest rate to be earned by an investor who bought it on Oct 15th, 2020 at the said market price and plan to hold on to the bond till maturity? Round to the 0.01%, i.e., two decimal places. Enter your answer in the form of a percentage. For example, if your answer is "12.34%", enter "12.34".Suppose you purchase a $1,000 TIPS on January 1, 2024. The bond carries a fixed coupon of 1 percent. Over the first two years, semiannual inflation is 4 percent, 1 percent, 2 percent, and 1 percent, respectively. For each six-month period, calculate the accrued principal and coupon payment. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Accrued Principal Coupon Payment First 6 months $ 30.00 $ 10.00 x Second 6 months $ 30.90 $ 10.30 X Third 6 months $ 10.61 $ 10.61 x Fourth 6 months S 42.86 $ 10.72 xCommonstealth Bank issued a bond that pays a 7.20% coupon quarterly and matures at the end of September 2036. If the current market rate for similar bonds is 6.50%, what is the bond price at the end of October 2021? Show your workings and round your final answers to two decimal places.
- You purchased a bond on January 1, 2018 which matures 7 years later on December 31st. The bond has a par value of $1,000, a stated coupon rate of 6.0% and pays interest semi-annually. On January 1, 2020, the bond sells for $928.50. What is its yield to maturity?It is now January 1, 2021, and you are considering the purchase of an outstanding bond that was issued on January 1, 2019. It has a 9.5% annual coupon and had a 30-year original maturity. (It matures on December 31, 2048) There is 5 years of call protection ( until December 31, after which time it can be called at 108 - that is, at 108% of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at 116.57% of par, or $1,165.70. a. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % What is the yield to call? Do not round intermediate calculations. Round your answer to two decimal places. % b. If you bought this bond, which return would you actually earn? I. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM. II. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. III. Investors…A $10,000 bond with a coupon rate of 5% was redeemable on July 1, 2028. It was purchased on September 10, 2015 when the yield rate was 6% compounded semi- annually. Determine the purchase price of the bond. Paragraph IU ... Purchase Date: Redemption Date: 取 A