QUESTION 15 A7.5 percent coupon bond with nine years left to maturity is priced to offer an 11.2 percent yield to maturity. You believe that in one year, the yield to maturity will be 8 percent. What is the change in price the bond will experience in dollars? (Assume interest payments are semiannual and par value is $1,000.) $97.75 O $101.50 $129.25 O $177.34

QUESTION 15 A7.5 percent coupon bond with nine years left to maturity is priced to offer an 11.2 percent yield to maturity. You believe that in one year, the yield to maturity will be 8 percent. What is the change in price the bond will experience in dollars? (Assume interest payments are semiannual and par value is $1,000.) $97.75 O $101.50 $129.25 O $177.34

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter5: Bonds, Bond Valuation, And Interest Rates

Section: Chapter Questions

Problem 24SP

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QUESTION 4 Based on your risk assessment, your required rate of return is 9 percent for a callable bond you own. This is a new bond with 20 years to maturity. It is a $1,000 par value bond paying 10 percent interest annually. The market price of the bond is $950. The bond may be called any time after 3 years and the call premium is $200. Find the yield-to-call. O A. 9.52% O B. 10.22% O C. 11.75% O D. 12.86% O E. 13.64%
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QUESTION 18 Suppose you purchase a $1000 face value Zero-coupon bond with a maturity of 30 years and a yield to maturity of 4% quoted with annual compounding What is the current price of the bond? Ⓒa. $1,400.00 O b.$ 308 31 O c. $1,400.21 Od.$ 400.00 Oe.$ 311.29
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Question 3 A bond has a face value or par value of $1000 and will mature at par in 10 years. The coupon rate is 10% compounded semi-annually. The yield rate is 8% compounded semi-annually. Find the excess of the semi-annual coupon payment over the required semi-annual yield. O a $10 Ob $100 Ос $20 Od $80
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