The following is certain information about three bonds. All numerical answers should be calculated to at least two decimal places. By convention, the face value of all bonds is taken as $100. For simplicity, assume coupon payments are paid once a year. Bond A: coupon rate 9.75%, term to maturity-10 years, current price = $160.55. Bond B: coupon rate 11.25%, term to maturity-5 years, yicld to maturity -2.35% p.a. Bond C: coupon rate - 6%, term to maturity 1 year, yield to maturity 1.45% p.a. Find the current price of Bond B. From your answer, what do say about this price when compared with the face value of the bond?

The following is certain information about three bonds. All numerical answers should be calculated to at least two decimal places. By convention, the face value of all bonds is taken as $100. For simplicity, assume coupon payments are paid once a year. Bond A: coupon rate 9.75%, term to maturity-10 years, current price = $160.55. Bond B: coupon rate 11.25%, term to maturity-5 years, yicld to maturity -2.35% p.a. Bond C: coupon rate - 6%, term to maturity 1 year, yield to maturity 1.45% p.a. Find the current price of Bond B. From your answer, what do say about this price when compared with the face value of the bond?

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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Compute the selling price of 8%, 10-year bonds with a par value of $310,000 and semiannual interest payments. The annual market rate for these bonds is 10%. Use present value Table B.1 and Table B.3 in Appendix B. Note: Round all table values to 4 decimal places, and use the rounded table values in calculations.
The prices of several bonds with face values of $1,000 are summarized in the following table: state whether it trades at a discount, at par, or at a premium. Bond A is selling at (Select from the drop-down menu.) . For each bond,
Harold Reese must choose between two bonds: Bond X pays $70 annual interest and has a market value of $845. It has 10 years to maturity.Bond Z pays $60 annual interest and has a market value of $870. It has five 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 X Bond Z b. Which bond should he select based on your answers to part a? multiple choice 1 Bond X Bond Z 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 X is 9.43 percent. What is the approximate yield to maturity on Bond Z? The exact yield to maturity? (Use the approximation formula to compute the approximate yield to maturity and use a calculator or Excel to compute the exact yield to maturity. Do…
The following table summarizes prices of various default-free zero-coupon bonds (expressed as a percentage of the face value): a. Compute the yield to maturity for each bond. b. Plot the zero-coupon yield curve (for the first five years). c. Is the yield curve upward sloping, downward sloping, or flat? a. Compute the yield to maturity for each bond. The yield on the 1-year bond is 3.92 %. (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Maturity (years) Price (per $100 face value) 1 $95.51 2 3 $91.10 $86.55 $81.69 $76.45 Print Donday
Use the method of averages to find the approximate yield rate for the bond shown in the table below. The bond is to be redeemed at par. Market Face Value Bond Rate Payable Semi-annually Time Before Maturity Quotation $10,000 6% 9 years 103.625 The yield rate is %. (Round the final answer to two decimal places as needed. Round all intermediate values to six decimal places as needed.)
The following table shows some data for three bonds. In each case, the bond has a coupon of zero. The face value of each bond is $1,000. Bond Price Maturity (Years) Yield to Maturity A $ 230 20 B с 230 17 10% 9 What is the yield to maturity of bond A? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places. Assume annual compounding. What is the maturity of B? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Assume annual compounding. What is the price of C? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Assume annual compounding.
Use the method of averages to find the approximate yield rate for the bond shown in the table below. The bond is to be redeemed at par. Bond Rate Face Value $5,000 Payable Semi-annually Time Before Redemption 7 years 5% Market Quotation 103.375 The yield rate is%. (Round the final answer to two decimal places as needed. Round all intermediate values to six decimal places as needed.)
The following table gives the prices of bonds Bond Principal ($) Time to maturity Annual coupon ($) Bond Price ($) 100 (years) 0.5 100 1 100 100 1.5 2 The bonds provide coupon are semiannual coupon bond a. Calculate 6-month, 12-month, 18-month and 24-month zero rates. 1567 0 98 100 100 101 b. What is the forward rate for the six-month period beginning in 12 months. c. Estimate the price of a two-year bond providing annual coupon of 7% annually.
A bond sells for $866.09 and has a coupon rate of 6.40 percent. If the bond has 14 years until maturity, what is the yield to maturity of the bond? Assume semiannual compounding. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Three Zero Coupon Bonds (ZCB) are issued on the market. They each have face value of £100 and maturity, respectively, of 1 year, 3 years and 4 years. Assume the first bond is sold for £99.01, the second one for £92.86 and the third one for £88.85. a) Find the annual effective yields of all three bonds. b) (Determine the term structure of forward rates associated with these bonds. c) An investor must pay £1,500 after four years. How much do they need to put aside at the end of the first year, if they decide to invest in the market?
Please answer all 4 yield to maturity with explanations thx
A bond sells for $894.17 and has a coupon rate of 6.20 percent. If the bond has 13 years until maturity, what is the yield to maturity of the bond? Assume semiannual compounding. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

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