Using the formula for YTM (yield to maturity) in the lecture, what is the rate of return for a bond issued by the Eastern Development Corporation of New England with a face value of $10.000 purchased for $15,000 that pays a 5.6% annual per year in dividends. The bond will be held for 8 years before it is redeemed. Answer should be calculated to two decimal places. For example if your answer is 5.55% enter 5.55 Hint: What is the value of the coupon associated with this bond? Your Answer

Using the formula for YTM (yield to maturity) in the lecture, what is the rate of return for a bond issued by the Eastern Development Corporation of New England with a face value of $10.000 purchased for $15,000 that pays a 5.6% annual per year in dividends. The bond will be held for 8 years before it is redeemed. Answer should be calculated to two decimal places. For example if your answer is 5.55% enter 5.55 Hint: What is the value of the coupon associated with this bond? Your Answer

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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Given: find the corporate bond value with an annual interest rate of 7%, making semi-annual payments, after 2 years, the bond matures and repaying the principal for our purposes, let’s assume a yield to maturity of 5%. Face value of the corporate bond Php. 1,500. can you compute the following?a. Annual Coupon Rateb. Coupon Payment per period1. Coupon2. Timec. Present Value of the Coupon Payment1. Semi-annual Coupon2. Yield of maturity3. Total Periodsd. Present Value of the Face Value
Give typing answer with explanation and conclusion A bond pays coupon rate of 5% with interest paid semi-annually. The price of the bond is $940 and the yield to maturity is 6.5%. The face value is $1,000. Estimate the number of years to maturity?
What would you pay for a HK$50,000 debenture bond that matures in 15 years and pays HK$5,000 a year in interest if you wanted to earn a yield of: (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Click here to view the factor table. (a) 10%? (Round answer to O decimal places, e.g. 458,581.) Amount to pay HK$
The interest rate on one-year Treasury bonds is 0.8 percent, the rate on two-year T-bonds is 0.9 percent, and the rate on three-year T-bonds is 1.0 percent. Using the expectations theory, compute the expected one-year interest rate in the second year (Year 2 only). Round your answer to one decimal place. % Using the expectations theory, compute the expected one-year interest rate in the third year (Year 3 only). Round your answer to one decimal place. %
Use Given-Required-Solution in answering problems. Provide cash flow diagram. Write answer on the space provided below. Solution shall be uploaded at the end of the quiz. A bond with a face value of P1,500,000 is sold at P1,400,000. If the bond matures in 5 years and pays 15 percent per annum, how much should the annual earning interest be? Round off to four decimal places in the final answer/s.
Your investments are earning 4% per annum compounded annually. You would like to compare this to the yield on bonds which are quoted on a compounded semi-annual basis. What is the equivalent return that you are earning per annum on a compounded semi-annual basis? (Do not round intermediate calculations. Report your result as a percentage. Round the final answers to 2 decimal places. Omit the % sign in your response. For example, if your answer is 3.21%, just enter 3.21) Numeric Response
1) Suppose that today's one-year interest rate is 5%. Consider the following one-year interest rates expected to occur over the next four years: 6%, 7%, 8% and 9%.a. Calculate the interest rate for two-year bonds, based on the expectations theory.b. What about five-year bonds?
Need help with both
Click here to view the factor table. https://education.wiley.com/content/Kieso_Intermediate_Accounting_17e/media/simulations/interest_rate_tables.pdf
Assume you have the following asset and liability in your Balance Sheet:Asset - Bond AModified Duration = 2.6 yearsValue= RM1.5 millionAAFARLiability - Bond BModified Duration = 3.1 yearsValue= RM1.0 milliona. Calculate the duration gap. b. What is the expected change in Net Worth if interest increases by 1%?attachment. calculation step by step

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