Question 6 Find the prices of the following bonds, all redeemable at par. (a) A 10-year 100, 5.0% bond yielding 7.2% (b) A 10-year 100, 5.5% bond yielding 7.7% (c) A 12-year 100, 5.0% bond yielding 7.2% (d) A 12-year 100, 5.5% bond yielding 7.7%

Question 6 Find the prices of the following bonds, all redeemable at par. (a) A 10-year 100, 5.0% bond yielding 7.2% (b) A 10-year 100, 5.5% bond yielding 7.7% (c) A 12-year 100, 5.0% bond yielding 7.2% (d) A 12-year 100, 5.5% bond yielding 7.7%

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 9FPE: Which of these two bonds offers the highest current yield? Which one has the highest yield to...

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Question 4 Consider the following three bonds: Bond P Bond Q Bond R $1,000 $1,000 $1,000 Par Value Coupon Rate Time to Maturity 5.00% 5.50% 0% 3 years 5 years 6 years Required Yield 4.00% 7.00% 5.20% (a) Explain the term "coupon rate". (b) Calculate the present values of each bond. State whether the bond is above par, at par or below par. (c) Bond ratings are an important element of the bond market. Explain what bond ratings are, who issues the ratings, and what the ratings mean to the average investor.
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Question: Bond prices depend on the market rate of interest, stated rate of interest, and time. a. Compute the price of the following 7% bonds of United Telecom. 1. $500,000 issued at 76.75. 2. $500,000 issued at 104.75. 3. $500,000 issued at 95.75. 4. $500,000 issued at 104.25. b. Which bond will United Telecom have to pay the most to retire the bond at maturity?
6.6 Construct a bond amortization schedule for a $100 par value 2-year bond with 7% coupons paid semiannually, redeemable at par and bought to yield 4% per annum.
A-5
3) Answer the below questions for bonds A and B. Bond A 8% 8% 2$100.00 $100.00 $100.00 $104.055 CouponYield to maturity Maturity (years) ParPrice Bond B 9% 8% (a) Calculate the actual price of the bonds for a 100-basis-point (1% annual) increase in interest rates. (b) Using (modified) duration, estimate the price of the bonds for a 100-basis- 5 point (1% annual) increase in interest rates.(c) Explain why your answers in parts (a) and (b) differ.
aj.4
Which of these two bonds offers the highest current yield? Which one has the highest yield to maturity? a. A 6.55 percent, 22-year bond quoted at 52.000 b. A 10.25 percent, 27-year bond quoted at 103.625
None
3. 67 Use the following tables to calculate the present value of a $763,000, 6%, 6-year bond that pays $45,780 ($763,000 x 6%) interest annually, if the market rate of interest is 7%. Present Value of $1 at Compound Interest spo 0.95238 0%%% 0.94340 0.93458 60606'0 2 000680 0.87344 0.82645 0.86384 0.83962 0.81630 0.75131 0.82270 0.79209 0.76290 0.68301 4. 0.78353 0.74726 0.62092 0.74622 0.70496 0.66634 0.56447 0.71068 0.66506 0.62275 0.51316 0.67684 0.62741 0.58201 0.46651 8. 0.64461 0.59190 0.54393 0.42410 0.61391 0.55839 0.50835 0.38554 Present Value of Annuity of $1 at Compound Interest Periods 0%%9 0% L 0.95238 0.94340 0.93458 1. 60606'0 1.85941 1.83339 1.80802 1.73554 2. 2.72325 2.67301 2.62432 2.48685 3. 3.54595 3.46511 3.38721 3.16987 OVUCC V ( Previous Next 3:29 PM a. 53°F Sunny (中罗 12/14/2021 LEGO prt sc 144 pause shilt home alt ctri
Question 4 A 1000 par value 5 year bond with 8% semiannual coupons was bought to yield 7.5% convertible semiannually. Determine the amount of premium amortized in the sixth coupon payment. (a) 2.08 (b) 3.08 (c) 4.08 (d) 5.08 (e) 6.08