•What is the bond equivalent yield and annual equivalent yield of a bond that is priced at $1075, has a coupon rate of 7%, matures in 10 years and pays interest payments semi-annually? •What is the price of a stock that will pay $3 dividend tomorrow and then will grow at 6% per annum? Assume a discount rate of 14%.--HINT--for your starting dividend--this is slightly different as you are immediately getting cash and future dividend.

•What is the bond equivalent yield and annual equivalent yield of a bond that is priced at $1075, has a coupon rate of 7%, matures in 10 years and pays interest payments semi-annually? •What is the price of a stock that will pay $3 dividend tomorrow and then will grow at 6% per annum? Assume a discount rate of 14%.--HINT--for your starting dividend--this is slightly different as you are immediately getting cash and future dividend.

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 market price of a bond with a maturity of 6 years, a coupon rate of 5.9% paid semi-annually, a par value of $1000, and a yield to maturity of 8.1%. (Round your answer to the nearest penny; enter your answer as a positive number, no $ sign.)
What is the price today of a 10 year 3 percent coupon bond that has a par value of $1000 and a yield to maturity of 3 percent? Answer: $ *DO NOT USE COMMA OR DOLLAR SIGN IN YOUR ANSWER.
Suppose the 1-year spot rate is 0.8%, and that a 2-year 1.5% annual coupon, a 3-year 2% annual coupon bonds are trading at par ($100). Calibrate a 2-year binomial interest rate model, assuming that interest rate volatility ?σ is 10%. What is the lowest rate at t=2?
General Electric has just issued a callable (at par) 10- year, 5.7% coupon bond with annual coupon payments. The bond can be called at par in one year or anytime thereafter on a coupon payment date. It has a price of $ 102.15. a. What is the bond's yield to maturity? b. What is its yield to call? c. What is its yield to worst? Question content area bottom enter your response here %. (Round to two decimal places.)
The current price of a non-dividend-paying stock is $40. Over the next year it is expected to rise to $44 or fall to $36. An investor buys put options with a strike price of $41. What is the price of each option? The risk-free interest rate is 2% per annum (assume discrete compounding). a. $2.35 b. $1.76 c. $2.18 d. $1.96
A firm's bonds have a maturity of 12 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 6 years at $1,209.43, and currently sell at a price of $1,365.89. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: % YTC: % What return should investors expect to earn on these bonds? I. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM. II. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM. III. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. IV. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC.
Consider the following $1,000 par value zero-coupon bonds: Bond Years to Maturity 1 YTM(%) 5.6% 2 3 4 6.6 7.1 7.6 According to the expectations hypothesis, what is the market's expectation of the yield curve one year from now? Specifically, what are the expected values of next year's yields on bonds with maturities of (a) one year? (b) two years? (c) three years? (Do not round Intermediate calculations. Round your answers to 2 decimal places.) APCO D Bond Years to Maturity YTM (%) B 1 % C 2 % D 3 %
i need the answer quickly
A firm's bonds have a maturity of 12 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 6 years at $1,211.14, and currently sell at a price of $1,370.78. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: % YTC: % What return should investors expect to earn on these bonds? Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM.
Suppose that you purchased a Baa rated $1000 annual coupon bond with a 3.8% coupon rate and a 10-year maturity at 2% above par value. What would the current yield (in %) be at the time of purchase (4 digits)?
A firm's bonds have a maturity of 8 years with a $1,000 face value, have an 8% semlannual coupon, are callable in 4 years at $1,048.54, and currently sell at a price of $1,094.91. What are their nominal yield to maturity and their nominal yield to call? Do not round Intermediate calculations. Round your answers to two decimal places. YTM: YTC: What return should investors expect to earn on these bonds? I. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. II. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. III. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM. IV. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM. -Select-
Assume you have a bond with a face value of 100 and a coupon rate of 2%. The current market price is 98.2. Would the yield to maturity increase or decrease if the price rises? Please explain why?

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