What is the market price of a $1,000, 9 percent bond paying a semiannual coupon if comparable market interest rates drop to 6 percent and the bond matures in 15 years? (Hint: Use Appendix A-2 and Appendix A-4.) Round Present Value of a Single Amount and Present Value of a Series of Equal Amounts in intermediate calculations to four decimal places. Round your answer to the nearest dollar. $
What is the market price of a $1,000, 9 percent bond paying a semiannual coupon if comparable market interest rates drop to 6 percent and the bond matures in 15 years? (Hint: Use Appendix A-2 and Appendix A-4.) Round Present Value of a Single Amount and Present Value of a Series of Equal Amounts in intermediate calculations to four decimal places. Round your answer to the nearest dollar. $
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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Question
Transcribed Image Text:Appendix A-2 Present Value of a Single Amount ($1) (Used to Compute the Discounted Present Value of Some
Known Future Single Lump Sum)
1%
7%
8%
20%
0.8333
0.6944
1
0.9901
2 0.9803 0.9612
3 0.9706
4
0.9610
0.9423
0.9238
0.9057
0.8880
5 0.9515
6
0.9420
0.8375
0.7903
0.7050 0.6663 0.6302
7 0.9327 0.8706 0.8131 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470
8
9
2% 3% 4% 5% 6%
9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19%
0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 0.9174 0.9091 0.9009 0.89 29 0.8850 0.8772 0.8696 0.8621 0.8547 0.8475 0.8403
0.9426 0.9246 0.9070 0.8900 0.8734 0.8573 0.8417 0.8264 0.8116 0.7972 0.7831 0.7695 0.7561 0.7432 0.7305 0.7182 0.7062
0.9151 0.8890 0.8638 0.8396 0.8163 0.7938 0.7722 0.7513 0.7312 0.71 18 0.6931 0.6750 0.6575 0.6407 0.6244 0.6086 0.5934 0.5787
0.8885 0.8548 0.8227 0.7921 0.7629 0.7350 0.7084 0.6830 0.6587 0.6355 0.6133 0.5921 0.5718 0.5523 0.5337 0.5158 0.4987 0.4823
0.8626 0.82 19 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209 0.5935 0.5674 0.5428 0.5194 0.4972 0.4761 0.4561 0.4371 0.4190 0.4019
0.7462
0.5963 0.5645 0.5346 0.5066 0.4803 0.4556 0.4323 0.4104 0.3898 0.3704 0.3521 0.3349
0.5132 0.4817 0.4523 0.4251 0.3996 0.3759 0.3538 0.3332 0.3139 0.2959 0.2791
0.9235 0.8535 0.7894 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 0.4339 0.4039 0.3762 0.3506 0.3269 0.3050 0.2848 0.2660 0.2487 0.2326
0.9143 0.8368 0.7664 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 0.4241 0.3909 0.3606 0.3329 0.3075 0.2843 0.2630 0.2434 0.2255 0.2090 0.1938
10 0.9053 0.8203 0.7441 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.3522 0.3220 0.2946 0.2697 0.2472 0.2267 0.2080 0.1911 0.1756 0.1615
11 0.8963 0.8043 0.7224 0.6496 0.5847 0.5268 0.4751 0.4289 0.3875 0.3505 0.3173 0.2875 0.2607 0.2366 0.2149 0.1954 0.1778 0.1619 0.1476 0.1346
12 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.3971 0.3555 0.3186 0.2858 0.2567 0.2307 0.2076 0.1869 0.1685 0.1520 0.1372 0.1240 0.1122
13 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 0.2575 0.2292 0.2042 0.1821 0.1625 0.1452 0.1299 0.1163 0.1042 0.0935
14 0.8700 0.7579 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 0.2992 0.2633 0.2320 0.2046 0.1807 0.1597 0.1413 0.1252 0.1110 0.0985 0.0876 0.0779
15 0.8613 0.7430 0.6419 0.5553 0.48 10 0.4173 0.3624 0.3152 0.2745 0.2394 0.2090 0.1827 0.1599 0.1401 0.1229 0.1079 0.0949 0.0835 0.0736 0.0649
0.8528 0.7284 0.6232 0.5339 0.4581 0.3936 0.3387 0.2919 0.2519 0.2176 0.1883 0.1631 0.1415 0.1229 0.1069 0.0930 0.0811 0.0708 0.06 18 0.0541
0.8444
0.6050
0.4363 0.3714 0.3166 0.2703 0.2311 0.1978 0.1696 0.1456 0.1252 0.1078 0.09 29 0.0802 0.0693 0.0600 0.05 20
18 0.8360
0.4155
0.2502 0.2120 0.1799 0.1528 0.1300 0.1108 0.0946 0.0808 0.0691 0.0592 0.0508 0.0437
0.3957
0.2317 0.1945 0.1635 0.1377 0.1161 0.0981 0.0829 0.0703 0.0596 0.0506 0.0431 0.0367
0.4564 0.3769 0.3118 0.2584 0.2145 0.1784 0.1486 0.1240
0.1037 0.0868 0.0728 0.0611 0.0514 0.0433 0.0365 0.0308
0.4388
0.3589 0.2942 0.2415 0.1987 0.1637 0.1351 0.1117 0.0926
0.0768 0.0638 0.0531 0.0443
0.0370 0.0309 0.0259 0.0217
0.4220 0.3418 0.2775 0.2257 0.1839 0.1502 0.1228 0.1007 0.0826 0.0680 0.0560 0.0462 0.0382 0.03 16 0.0262 0.0218 0.0181
0.4057 0.3256 0.2618 0.2109 0.1703 0.1378 0.1117 0.0907 0.0738 0.0601 0.0491 0.0402 0.03 29 0.0270 0.0222 0.0183 0.0151
24 0.7876 0.6217 0.4919 0.3901 0.3101 0.2470 0.1971 0.1577
0.1015 0.0817 0.0659 0.0532 0.0431
0.0349
0.0284 0.0231 0.0188 0.0154 0.0126
25 0.7798 0.6095 0.4776 0.3751 0.2953 0.2330 0.1842 0.1460
0.0736 0.0588 0.0471 0.0378 0.0304 0.0245 0.0197 0.0160 0.0129 0.0105
0.4637 0.3607 0.2812 0.2198 0.1722 0.1352 0.1064 0.0839 0.0663 0.0525 0.0417 0.0331 0.0264 0.0211 0.0169 0.0135 0.0109
0.4502 0.3468 0.2678 0.2074 0.1609 0.1252 0.0976 0.0763 0.0597 0.0469 0.0369 0.0291 0.0230 0.0182 0.0144 0.0115 0.0091 0.0073
0.4371 0.3335 0.2551 0.1956 0.1504 0.1159 0.0895 0.0693 0.0538 0.0419 0.03 26 0.0255 0.0200 0.0157 0.0123 0.0097 0.0077 0.0061
0.4243 0.3207 0.2429 0.1846 0.1406 0.1073 0.0822 0.0630 0.0485 0.0374 0.0289 0.0224 0.0174 0.0135 0.0105 0.0082 0.0064 0.0051
0.4120 0.3083 0.2314 0.1741 0.1314 0.0994 0.0754 0.0573 0.0437 0.0334 0.0256 0.0196 0.0151 0.0116 0.0090 0.0070 0.0054 0.0042
0.0972 0.0668 0.0460 0.03 18 0.0221 0.0154 0.0107 0.0075 0.0053 0.0037 0.0026 0.0019 0.0013 0.0010 0.0007
0.0543 0.0339 0.0213 0.0134 0.0085 0.0054 0.0035 0.0022 0.0014 0.0009 0.0006 0.0004
16
17
0.5134
0.7142
0.7002
0.0451
0.0376
0.5874
0.4936
0.3503 0.2959
19 0.8277 0.6864
0.5703
0.4746
0.3305 0.2765
0.0313
0.0261
0.8195
0.6730
0.8114 0.6598
0.8034 0.6468
23 0.7954 0.6342 0.5067
0.5537
0.5375
0.5219
0.1264
0.1160
0.0923
26 0.7720 0.5976
0.0087
27 0.7644 0.5859
28
0.7568 0.5744
0.7493 0.5631
29
0.7419
0.5521
0.6717
0.4529
0.3066
0.2083
0.14 20
0.6080 0.3715
0.2281
0.1407
0.0872
0.0003 0.0002 0.0001
n
20
21
22
30
40
50
Transcribed Image Text:Bond Selling Price
What is the market price of a $1,000, 9 percent bond paying a semiannual coupon if comparable market interest rates drop to 6 percent and the bond matures in 15 years? (Hint: Use Appendix A-2 and Appendix A-4.) Round Present Value of a Single Amount
and Present Value of a Series of Equal Amounts in intermediate calculations to four decimal places. Round your answer to the nearest dollar.
$
Expert Solution
Step 1
Information Provided:
- Par value = $1000
- Semi-Coupon Rate = 9%
- Interest rate = 6%
- Years = 15
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