The following is a list of prices for zero-coupon bonds of various maturities.a. Calculate the yield to maturity for a bond with a maturity of () one year; (ii) two years; (i) three years; (v) four years. Assume annualcoupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.)Maturity (Years)1234$$$$Price of Bond950.90899.97877.62785.26YIM%%%Check my w% The following is a list of prices for zero-coupon bonds of various maturities.a. Calculate the yield to maturity for a bond with a maturity of () one year; (ii) two years; (i) three years; (v) four years. Assume annualcoupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.)Maturity (Years)1234$$$$Price of Bond950.90899.97877.62785.26YIM%%%Check my w%

Step 1 The settlement price for a transaction that won't happen until a future date is known as a…

The following is a list of prices for zero-coupon bonds of various maturities. a. Calculate the yield to maturity for a bond with a maturity of () one year; (i) two years; (i) three years: (v) four years. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Maturity (Years) 1 2 3 4 $ $ $ S Price of Bond 950.90 899.97 877.62 785.26 YIM % % % %

The following is a list of prices for zero-coupon bonds of various maturities. a. Calculate the yield to maturity for a bond with a maturity of () one year; (i) two years; (i) three years: (v) four years. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Maturity (Years) 1 2 3 4 $ $ $ S Price of Bond 950.90 899.97 877.62 785.26 YIM % % % %

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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What is the Macaulay duration of a bond with a coupon of 6.0 percent, twelve years to maturity, and a current price of $1,062.40? What is the modified duration? (Do not round intermediate calculations. Round your answers to 3 decimal places.) Macaulay Modified Duration 8.989 Years 8.537 Years
7. Suppose a bond is purchased with a settlement date of October 15 and the next coupon payment is on December 1. The par amount purchased on the bond is $100,000, and its annual coupon rate is 4% paid semiannually. (1) What is the accrued interest using the 30/360-day count convention? (2 points) (2) What is the accrued interest using the actual/actual day count convention? (2 points)
What is the Macaulay duration of a bond with a coupon of 5.4 percent, nine years to maturity, and a current price of $1,055.40? What is the modified duration? (Do not round intermediate calculations. Round your answers to 3 decimal places.) Macaulay Modified Duration 8.046 Years 7.082 Years
Using semiannual compounding, find the prices of the following bonds: a. A 9.8%, 15-year bond priced to yield 7.7%. b. A 7.3%, 10-year bond priced to yield 9.4%. c. A 11.6%, 20-year bond priced at 9.5%. Repeat the problem using annual compounding. Then comment on the differences you found in the prices of the bonds. a1. Using semiannual compounding, the price of the bond is $nothing. (Round to the nearest cent.)
A bond has a semi-annual coupon payment of $32.4. What is the coupon RATE? Convert to a percent. Round to 2 decimal places. Include a dollar sign ($) or percent (%) as appropriate. (NOTE: the coupon RATE is given annually, yet the coupon PAYMENT is semi-annual.) Answer:
What are the Modified Duration and Macaulay Duration of the following bond? Coupon Rate = 8% (Semi-annually paid) YTM = 9% Maturity = 2 Years Par Value = 1,000 (Hint: this question is similar to Example 1 and Example 2 on slides) ModD = 1.886 and MacD = 1.805 ModD = 1.784 and MacD = 1.954 ModD = 1.954 and MacD = 1.784 ModD = 1.805 and MacD = 1.886
An insurance company is analyzing the following three bonds, each with five years to maturity, annual interest payments, and is using duration as its measure of interest rate risk. What is the duration of each of the three bonds? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) a. $10,000 par value, coupon rate=9.7%, r 0.17 b. $10,000 par value, coupon rate 11.7%, r= 0.17 c. $10,000 par value, coupon rate = 13.7%, p=0.17 Duration of the bond years
You are given the following prices of zero coupon bonds per $1.00 of maturity value: Term in years 1 2 3 4 Zero-coupon bond prices 0.9852 0.9701 0.9546 0.9388 Determine the one-year forward rate for year 4 (ie, the one-year forward rate deferred for 3 years. a) 1.629% b) 1.526% c) 1.572% d) 1.729% e) 1.683%
Using semiannual compounding, find the prices of the following bonds: a. A 9.4%, 15-year bond priced to yield 7.2%. b. A 7.3%, 10-year bond priced to yield 9.5%. c. A 12.8%, 20-year bond priced at 10.6%. Repeat the problem using annual compounding. Then comment on the differences you found in the prices of the bonds. a1. Using semiannual compounding, the price of the bond is $. (Round to the nearest cent.) b1. Using semiannual compounding, the price of the bond is $. (Round to the nearest cent.) c1. Using semiannual compounding, the price of the bond is $. (Round to the nearest cent.) a2. Using annual compounding, the price of the bond is $ b2. Using annual compounding, the price of the bond is $ c2. Using annual compounding, the price of the bond is $. (Round to the nearest cent.) Comment on the differences you found in the prices of the bonds. (Select the best answer below.) (Round to the nearest cent.) (Round to the nearest cent.) Bonds selling at a premium sell at lower prices when…
A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 8.00%. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 3 decimal places. a. What is the yield to maturity if the bond is selling for $930? Yield to maturity b. What is the yield to maturity if the bond is selling for $1,000? Yield to maturity % Yield to maturity 8.000 % c. What is the yield to maturity if the bond is selling for $1,135? %
Need help with C Approximate yield to maturity An investor must choose between two bonds: Bond A pays $90 annual interest and has a market value of $815. It has 15 years to maturity. Bond B pays $81 annual interest and has a market value of $700. It has eight years to maturity. Assume the par value of the bonds is $1,000. a. Compute the current yield on both bonds. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Current Yield Bond A11.04% Bond B11.57% c. A drawback of current yield is that it does not consider the total life of the bond. For example, the approximate yield to maturity on Bond A is 11.51 percent. What is the approximate yield to maturity on Bond B? The exact yield to maturity? (Use the approximation formula to compute the approximate yield to maturity and use the calculator method to compute the exact yield to maturity. Do not round intermediate calculations. Input your answers as a percent rounded to 2…

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