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 RateFace Value$5,000Payable Semi-annuallyTime BeforeRedemption7 years5%MarketQuotation103.375The yield rate is%.(Round the final answer to two decimal places as needed. Round all intermediate values to six decimal places as needed.)

Yield rate refers to the percentage of the investments made by the investors over a period of…

Use the method of averages to find the approximate yield rate for the bond shown in the table below. The bond is to be Bond Rate Payable Semi-annually Time Before Redemption Face Value $5,000 5% 7 years 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.)

Use the method of averages to find the approximate yield rate for the bond shown in the table below. The bond is to be Bond Rate Payable Semi-annually Time Before Redemption Face Value $5,000 5% 7 years 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.)

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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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 not round…
A bond has a Macaulay duration equal to 9.5 and a yield to maturity of 7.5%. What is the modified duration of this bond? The modified duration of this bond is (Round to two decimal places.)
Calculate the Macaulay duration of a 12%, $1,000 par bond that matures in three years if the bond's YTM is 14% and interest is paid semiannually. a. Calculate this bond's modified duration. Do not round intermediate calculations. Round your answer to two decimal places. years b. Assuming the bond's YTM goes from 14% to 13.5%, calculate an estimate of the price change. Do not round intermediate calculations. Round your answer to three decimal places. Use a minus sign to enter negative value, if any. %
During a period of severe inflation, a bond offered a nominal HPR of 85% per year. The inflation rate was 76% per year. a. What was the real HPR on the bond over the year? (Round your answer to 2 decimal places.) Real HPR % b. Find the approximation Freal Inom i. Compare your answer in part b to the one in part a. Approximation % -
Calculate the bond equivalent yield and effective annual return on a negotiable CD that is 115 days from maturity and has a quoted nominal yield of 6.54 percent. (Use 365 days in a year. Do not round intermediate calculations. Round your percentage answers to 3 decimal places. (e.g., 32.161)) Bond equivalent yield Effective annual return % %
What is the YTM of the bond given the information below. The bond makes annual interest payments. (Do not round intermediate calculations, round answer to two decimals, i.e. 32.16) Coupon Rate:8.4% Maturity (years):6 Current Price: $1,159.63 Par value: $1,000.00
Use the method of averages to find the approximate yield rate for the bond with the following characteristics: Face value = $6000 Bond rate payable semi-annually = 7% Time before maturity: 7 years Market quotation = $102.75 NOTE: The bond is to be redeemed at par.
Following bond if interest (coupon) is paid annually? (Round to two decimal places.) - X Years to Data Table pon Rate Maturity 5% 15 following bond if interest (coupon) is (Click on the following icon in order to copy its contents into a spreadsheet) Yiold to Maturity Years to Years to Par Value $1,000.00 $1,000,00 $5,000.00 $5,000,00 Coupon Rate 5% 9% 8% 11% Maturity 15 25 20 20 Price $900 00 $1,000.00 $4,140.00 $7,110.00 pon Rate Maturity 9% 25 Print Done
One bond has a coupon rate of 7.6%, another a coupon rate of 9.3%. Both bonds pay interest annually, have 14-year maturities, and sell at a yield to maturity of 8.0%. a. If their yields to maturity next year are still 8.0%, what is the rate of return on each bond? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal place. Rate of return Bond 1 % Bond 2 % b. Does the higher-coupon bond give a higher rate of return ove this period? Does the higher-coupon bond give a higher rate of return over this period?
Determine the purchase price at the indicated time before maturity of the following bond redeemed at par shown in the table below. Par Value $9,000 Bond Rate Payable Semi-Annually 10.5% Time Before Maturity Yield Rate 9 years 11.5% Conversion Period semi-annually The purchase price of the bond is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
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Please assist with the following question with full handwritten working: What is the value of a 10 year, 8.2% coupon bond with semiannual coupons. Assume the par value of the bond is $100 and it is redeemable at par. The interest rate (nominal, converted semiannually) is 10.6%.

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