Please show full work and do not use Excel or Financial Calculator (The Lo Sun Corporation offers a 6% bond with a current market price of $875.05. The yield to maturity is 7.34%. The face value is $1,000. Interest is Daid semiannually. How many years is it until this bond matures? A. 16 years B. 18 years C. 24 years D. 30 wears E. 32 years

Please show full work and do not use Excel or Financial Calculator (The Lo Sun Corporation offers a 6% bond with a current market price of $875.05. The yield to maturity is 7.34%. The face value is $1,000. Interest is Daid semiannually. How many years is it until this bond matures? A. 16 years B. 18 years C. 24 years D. 30 wears E. 32 years

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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You will be paying $12,800 a year in tuition expenses at the end of the next two years. Bonds currently yield 8% Required: a. What are the present value and duration of your obligation? (Do not round intermediate calculations. Round "Present value" to 2 decimal places and "Duration" to 4 decimal places) Present value Duration Answer is complete and correct. S 22.825 79 14000 years b. What is the duration of a zero-coupon bond that would immunize your obligation and its future redemption value? (Do not round intermediate calculations. Round "Duration to 4 decimal places and "Future redemption value to 2 decimal places.) Duration Future redemption value Answer is not complete. 14800 years
You will be paying $9,500 a year in tuition expenses at the end of the next two years. Bonds currently yield 8%. a. What is the present value and duration of your obligation? (Do not round intermediate calculations. Round "Present value" to 2 decimal places and "Duration" to 4 decimal places.) Present value Duration b. What maturity zero-coupon bond would immunize your obligation? (Do not round intermediate calculations. Round "Duration" to 4 decimal places and "Face value" to 2 decimal places.) Duration Face value years Not position years -C. ppose you buy a zero-coupon bond with value and duration eq your oblig Now suppose that imme increase to 9%. What happens to your net position, that is, to the difference between the value of the bond and that of your tuition obligation? (Do not round intermediate calculations. Input the amount as a positive value. Round your answer to 2 decimal places.) in value by
Related to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 8 percent interest annually and have 15 years until maturity. You can purchase the bond for $1,075. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 6 percent? Question content area bottom Part 1 a. The yield to maturity on the Saleemi bonds is enter your response here%. (Round to two decimal places.) Part 2 b. You ▼ should should not purchase the bonds because your yield to maturity on the Saleemi bonds is ▼ greater less than the one on a comparable risk bond. (Select from the drop-down menus.)
Q) An $6,000 face-value bond matures in four (4) years and pays 6% per year payable Semiannually An investor wants a 10% return per year compounded Semiannually. How much should the investor pay for the bond? Explain it correctly. Note:- not solve in excel works.Typed or handwriting onlys
You are considering an investment in 30-year bonds issued by Moore Corporation. The bonds have no special covenants.The Wall Street Journal reports that one-year T-bills are currently earning 3.25 percent. Your broker has determined the following information about economic activity and Moore Corporation bonds: Real interest rate " 2.25% Default risk premium " 1.15% Liquidity risk premium " 0.50% Maturity risk premium " 1.75% What is the inflation premium? What is the fair interest rate on Moore Corporation 30-year bonds?
You are considering an investment in 30-year bonds issued by Moore Corporation. The bonds have no special covenants. The Wall Street Journal reports that 1-year T-bills are currently earning 3.25 percent. Your broker has determined the following information about economic activity and Moore Corporation bonds: (LG 2-6) Real risk-free rate=2.25% Default risk premium = 1.15% Liquidity risk premium - 0.50% = Maturity risk premium = 1.75% a. What is the inflation premium? b. What is the fair interest rate on Moore Corporation 30-year bonds?
Use the following to answer questions 4 – 7 (Round answers to the nearest dollar) TR issues 6.0%, 10-year bonds with a total face amount of $1,500,000. The market interest rate for bonds of similar risk and maturity is 5.9%. Interest is paid semi-annually. DO NOT ROUND YOUR ANSWERS UNTIL YOU FULLY COMPLETE THE PROBLEM SET (input your answers after you've completed the entire problem). $ the issue price of the bond? 4. (rounded to nearest dollar). What is 5. $ (rounded to nearest dollar). When the company records the first interest payment, how much record will the company for interest expense? 6. $ (rounded to nearest dollar). What is the bond liability (carrying amount) after the first interest payment? $ company records the second interest payment, how much 7. (rounded to nearest dollar). When the will the company record for interest expense?
Chuck's of Czechia is selling a perpetual bong that will provide the bondholder with a $50 / year forever. The first payment to the bondholder is later this afternoon and then the following payment is one year from now. Assuming an interest rate of 6%, what is the value of this bond? Choose the closest. a) $666.67 b) $833.33 c) $333.33 d) $883.33
You are considering an investment in 30-year bonds issued by Moore Corporation. The bonds have no special covenants. The Wall Street Journal reports that 1-year T-bills page 55are currently earning 3.25 percent. Your broker has determined the following information about economic activity and Moore Corporation bonds: Real risk-free rate = 2.25% Default risk premium = 1.15% Liquidity risk premium = 0.50% Maturity risk premium = 1.75% What is the inflation premium? What is the fair interest rate on Moore Corporation 30-year bonds?
You will be paying $12,200 a year in tuition expenses at the end of the next two years. Bonds currently yield 9%. Required: a. What are the present value and duration of your obligation? (Do not round intermediate calculations. Round "Present value" to 2 decimal places and "Duration" to 4 decimal places.) b. What is the duration of a zero-coupon bond that would immunize your obligation and its future redemption value? (Do not round intermediate calculations. Round "Duration" to 4 decimal places and "Future redemption value" to 2 decimal places.) c. Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates immediately increase to 10%. What happens to your net position, that is, to the difference between the value of the bond and that of your tuition obligation? (Enter your answer as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.) d. Suppose you buy a zero-coupon bond with value…
(Related to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 12 percent interest annually and have 11 years until maturity. You can purchase the bond for $945. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 14 percent? Question content area bottom Part 1 a. The yield to maturity on the Saleemi bonds is enter your response here%. (Round to two decimal places.)
PLEASE DO NOT PROVIDE AN EXCEL SOLUTION a. 5% 5-year bond is available in the market at Rs. 950. What is the YTM of bond? b. If above bond will be called after three years at Rs. 970. What is the YTC of bond? c. A person purchases above bond at Rs. 950 and sells it next year at Rs 960. What is current yield and total return?

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