Problem #1: A bond issued on February 1, 2004 with face value of $9800 has semiannual coupons of 4.5%, and can beProblem #1:redeemed for par (face value) on February 1, 2025. What is the accrued interest and the market price (the "clean"price) of the bond on November 15, 2006, if the bond's yield on that date is to be 7.5%? (use actual/actual foraccrued interest).accrued interest and market price (in that order),separated with a commaboth answers correct to 2 decimalsJust SaveSubmit Problem #1 for Grading

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Answered: Problem #1: A bond issued on February…

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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Problem #1: A bond issued on February 1, 2004 with face value of $37000 has semiannual coupons of 5%, and can be redeemed for par (face value) on February 1, 2025. What is the accrued interest and the market price (the "clean" price) of the bond on November 15, 2006, if the bond's yield on that date is to be 6%? (use actual/actual for accrued interest).
Problem #1: A bond issued on February 1, 2004 with face value of $44400 has semiannual coupons of 8%, and can be redeemed for par (face value) on February 1, 2021. What is the accrued interest and the market price (the "clean" price) of the bond on November 15, 2006, if the bond's yield on that date is to be 11%? (use actual/actual for accrued interest). Problem #1: accrued interest and market price (in that order), separated with a comma both answers correct to 2 decimals
A bond issued on February 1, 2004 with face value of $18000 has semiannual coupons of 6%, and can be redeemed for par (face value) on February 1, 2025. What is the accrued interest and the market price (the “clean” price) of the bond on November 15, 2006, if the bond’s yield on that date is to be 8%? (use actual/actual for accrued interest).
A bond issued on February 1, 2004 with face value of $34400 has semiannual coupons of 7.5%, and can be redeemed for par (face value) on February 1, 2019. What is the accrued interest and the market price (the "clean" price) of the bond on November 15, 2006, if the bond's yield on that date is to be 8.5% ? (use actual/actual for accrued interest). Problem #1: accrued interest and market price (in that order), separated with a comma both answers correct to 2 decimals
A bond issued on February 1, 2004 with face value of $26600 has semiannual coupons of 9%, and can be redeemed for par (face value) on February 1, 2020. What is the accrued interest and the market price (the "clean" price) of the bond on November 15, 2006, if the bond's yield on that date is to be 11% ? (use actual/actual for accrued interest). accrued interest and market price (in that order),
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A $11,000 bond with a coupon rate of 5.35% is redeemable on July 01, 2031. It is purchased on February 10, 2025 when the yield rate is 5.85% compounded semi- annually. Please include a well-labelled timeline diagram. a. What is the purchase price of the bond? Round to the nearest cent b. What is the amount of discount or premium on the bond?
Exercise: Dirty/cleanPrice calculation A bond has face value of $1000. The bond’s yield to maturityis 6% andthe annual coupon rate is 8% with semiannual coupon payments.The maturity of the bond is 5years. The bond was issued on 1/1/2017, and one bought on 4/1/2018. Answer the following three questions: a.What is the dirty price of the bond? b.What is the accrual interest of the bond? c.What is its clean price?
LOW4486452: The coupon rate is 3.1%, the last trade price is $111.33, and the Maturity date is 05/03/2027 Using the bond LOW4486452, assume that the price does not include accrued interest. Calculate the market price of that bond in dollars and calculate the accrued interest. You will assume that today is the 1st of November. Also, assume that the bond pays interest on the month that the bond matures and 6 months after. Also, assume that the interest is paid on the first of the month no matter the maturity date. For example, suppose a bond matures on 4/8/2042. You will assume that interest is paid on 4/1 and 10/1 Making these assumptions, how much accrued interest would you pay the owner if you bought the bond? What would the total amount be that you paid for the bond?
CASE2: A 10-year 10 percent semiannual coupon bond, with a par value of $1,000, may be called in 4 years at a call price of $1,160. The bond sells for $1,200. (Assume that the bond has just been issued.) What is the bond's yield to maturity? What is the bond's current yield? What is the bond's capital gain or loss yield? What is the bond's yield to call? How would the price of the bond be affected by changing interest rates? (Hint: Conduct a sensitivity analysis of price to changes in the yield to maturity, which is also the going market interest rate for the bond. Assume that the bond will be called if and only if the going rate of interest falls below the coupon rate. That is an oversimplification but assume it anyway for purposes of this problem.)
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