Suppose you want to purchase a bond with a $1,000 par value maturing in 4 years with an 8% annual coupon interest rate, and has a market interest rate of 6%. What's the price or the value of this bond? Select one: O a. $1,069.31 O b. $9712 Oc $1,000 O d. 927.66

Suppose you want to purchase a bond with a $1,000 par value maturing in 4 years with an 8% annual coupon interest rate, and has a market interest rate of 6%. What's the price or the value of this bond? Select one: O a. $1,069.31 O b. $9712 Oc $1,000 O d. 927.66

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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Question

Suppose you want to purchase a bond with a $1,000 par value maturing in 4 years with an 8% annual coupon interest rate, and
has a market interest rate of 6%.
What's the price or the value of this bond?
Select one:
O a. $1,069.31
O b. $9712
O c. $1,000
7
O d. 927.66

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6. You are obligated to pay $10,000 in a year. There are two bonds with the following information Bond A Bond B Time to maturity 2 years 0.5 year Coupon rate 7% 5% Price $101.86 $99.51 The yields for both bonds are 6%. Construct a portfolio of bonds A and B using the immunization technique.
R
An investor is considering purchasing a 10-year zero coupon bond of $1,000 par value.calculate the fair value of the bond if the current interest rate for equally risky bonds is 12.4%? O a. 123$ O b. 310.7$ O c. 932.2$ O d. 1234.4$
Assume that you are considering the purchase an AEP 30-year, bond with an annual coupon rate of 8.22%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 11.45% yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond? $824.55 $945.01 $904.47 891.25 $727.90
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Question 1?
B

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