Please given correct answer financial accounting Suppose the U.S. Treasury offers to sell you a bondfor $3,000. No payments will be made until the bondmatures 10 years from now, at which time it will beredeemed for $5,000. What interest rate would youearn if you bought this bond at the offer price?A. 3.82%B. 4.25%C. 4.72%D. 5.24%E. 5.77%

To calculate the interest rate (also known as the yield to maturity) for the bond, we use the…

Answered: Suppose the U.S. Treasury offers to…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 9P

See similar textbooks

Similar questions

Suppose the U.S. Treasury offers to sell you a bond for $697.25. No payments will be made until the bond matures 4 years from now, at which time it will be redeemed for $1,000. What interest rate would you earn if you bought this bond at the offer price? a. 5.51% b. 35.86% c. 7.48% d. 9.43% e. 12.77%
Suppose the U.S. Treasury offers to sell you a bond for $687.25. No payments will be made until the bond matures 5 years from now, at which time it will be redeemed for $1,000. What interest rate would you earn if you bought this bond at the offer price?
The U.S. Treasury offers to sell you a bond for $585.43. No payments will be made untilthe bond matures 10 years from now, at which time it will be redeemed for $1,000.What interest rate would you earn if you bought this bond for $585.43? What ratewould you earn if you could buy the bond for $550? For $600? (5.5%, 6.16%, 5.24%)
Financial accounting
General accounting
You have purchased a U.S. Treasury bond for $3,150.00. No payments will be made until the bond matures 10 years from now, at which time it will be redeemed for $5,150. What interest rate will you earn on this bond? Group of answer choices 6.18% 5.04% 3.73% 5.67% 4.46%
4. Suppose the U.S. Federal Reserve offers a bond for $635.20 at 8 years to maturity. You will not have to issue payments until the maturity date, at which time you will receive $950. Calculate the interest rate if you decide to buy it. Determine the interest rate if you manage to buy it at a price of $555.
You purchase a U.S. 8.14%, 30-year bond with a face value of $100 selling at par. 1. What is the yield to maturity on the bond? 2. What is the duration of the bond? 3. If you sold the bond at the end of 1 year what price would you receive for it if its yield to maturity increased to 10 percent? 4. What cash flow yield would you earn on the bond if sold it at the end of 10 years at a yield to maturity of 10 percent? 5. What realized compound yield (i.e. RCY) would your earn on the bond over 10 years if you were able to reinvest the coupons at 8 percent per year? Assume the bond can be sold at the end of 10 years at a yield to maturity of 8 percent?
You have purchased a U.S. Treasury bond for $3,000. No payments will be made until the bond matures 10 years from now, at which time it will be redeemed for $5,000. What interest rate will you earn on this bond? 3.82% 4.25% 4.72% 5.24% 5.77%
4
Suppose that a short-term government bond has a face value of $100. If the price of that bond is $95. What is the insterest rate of that bond? 5.3% 9.0% 10.0% 1.0%
Suppose the government decides to issue a new savings bond that is guaranteed to double in value if you hold it for 18 years. Assume you purchase a bond that costs $100. a. What is the exact rate of return you would earn if you held the bond for 18 years until it doubled in value? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If you purchased the bond for $100 in 2020 at the then current interest rate of .22 percent year, how much would the bond be worth in 2028? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. In 2028, instead of cashing in the bond for its then current value, you decide to hold the bond until it doubles in face value in 2038. What annual rate of return will you earn over the last 10 years?

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

SEE MORE TEXTBOOKS

Suppose the U.S. Treasury offers to sell you a bond for $3,000. No payments will be made until the bond matures 10 years from now, at which time it will be redeemed for $5,000. What interest rate would you earn if you bought this bond at the offer price? A. 3.82% B. 4.25% C. 4.72% D. 5.24% E. 5.77%