Subject :- Accounting Required:A bond has a par value of $1,000, a time to maturity of 10 years, and a coupon rate of 8.70% with interest paid annually. If the currentmarket price is $870, what will be the approximate capital gain of this bond over the next year if its yield to maturity remainsunchanged? (Do not round intermediate calculations. Round your answer to 2 decimal places.)Capital gainS7.81

Capital gain refers to an amount that is earned from selling the asset more than its purchase…

Answered: Required: A bond has a par value of…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 9P

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Required: A bond has a par value of $1,000, a time to maturity of 20 years, and a coupon rate of 7.30% with interest paid annually. If the current market price is $730, what will be the approximate capital gain of this bond over the next year if its yield to maturity remains unchanged? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Capital gain
ces A bond has a par value of $1,000, a time to maturity of 10 years, and a coupon rate of 8.40% with interest paid annually. If the current market price is $840, what will be the approximate capital gain of this bond over the next year if its yield to maturity remains unchanged? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Capital gain
A bond has a par value of $1,000, a time to maturity of 15 years, and a coupon rate of 7.80% with interest paid annually. If the current market price is $780, what will be the approximate capital gain of this bond over the next year if its yield to maturity remains unchanged? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
D4) Suppose that there is 30-year coupon bond with par value of $100 and Macaulay duration of 20.56. The coupon rate is unknown. Currently, the bond is traded at $90 and the yield is flat at 20% pa. Yield to maturity is an annualized simple interest rate compounded annually. If the bond yield increases by 50 basis points, what is the approximation of the percentage capital gain or loss? Please choose the correct range for the percentage capital gain/loss, i.e., if it is -3.5%, please select “A value between -3% and -4%” A value between -9% and -10% A value between -8% and -9% None of the other answers are correct. A value between -7% and -8% A value between -10% and -11%
1. Consider a real return bond with a face value of $15,000 and a coupon yield of 5.2%. What is the coupon payment after one year if the inflation rate is 6.8%? Select one: a) $817.44 b) $833.04 c) $825.24 d) $809.64 I
A 2-year maturity bond with face value of $1,000 makes annual coupon payments of $88 and is selling at face value. What will be the rate of return on the bond if its yield to maturity at the end of the year is: Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. 6% b. 8.8% c. 10.8% Rate of Return % % %
What is the value of a bond that has a par value of $1,000, a coupon of $120 (annually), and matures in 10 years? Assume a required rate of return of .0702. Instruction: Type your answer in dollars, and round to two decimal places.
D3) Finance Suppose that there is 30-year coupon bond with par value of $100 and Macaulay duration of 20.56. The coupon rate is unknown. Currently, the bond is traded at $90 and the yield is flat at 20% pa. Yield to maturity is an annualized simple interest rate compounded annually. If the bond yield increases by 50 basis points, what is the approximation of the percentage capital gain or loss? Please choose the correct range for the percentage capital gain/loss, i.e., if it is -3.5%, please select “A value between -3% and -4%” A value between -9% and -10% A value between -8% and -9% None of the other answers are correct. A value between -7% and -8% A value between -10% and -11%
2. A bond has a par value of $1,000, a time to maturity of 10 years, and a coupon rate of 8% with interest paid annually. If the current market price is $800, what will be the approximate capital gain yield of this bond over the next year if its yield to maturity remains unchanged?
What is the value of a bond that matures in 17 years, makes an annual coupon payment of $50, and has a par value of $1,000? Assume a required rate of return of .0590. Instruction: Type your answer in dollars, and round to two decimal places
What is the Macaulay duration of a 7 percent semiannual coupon bond with two years to maturity and a current price of $1,055.30? (Note: You are required to solve the problem by calculating "Years \times PV / Bond Price" for each cash flow and summing the results. YTM and PV must be calculated using a financial calculator. Round your answer to four decimal places.)
1. A two-year bond with $1,000 face-value and 10% coupon rate is sold for $1,000 today (Year 1). If one year later (Year 2) the market interest rate decreases by 5%, then this bond will have a market price of $ ____ (round UP the nearest integer) next year (Year 2). 2. Using the one-period valuation model, assuming a year-end dividend of $11.00, an expected sales price of $110, and a required rate of return of 10%, the current price of the stock would be $ ________. 3. Last year you purchased a bond with an interest rate of 5 percent. Now the interest rate on the bond market drops to 4%. Then People can use a lower price to buy your bond today. (True or False)

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