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Years to Yield to Par Value Coupon Rate Maturity Maturity Price $1,000.00 9% 15 ? $790.00 $1,000.00 7% 25 ? $600.00 $5,000.00 8% 25 ? $4,500.00 $1,000.00 5% 20 ? $780.00

Years to Yield to Par Value Coupon Rate Maturity Maturity Price $1,000.00 9% 15 ? $790.00 $1,000.00 7% 25 ? $600.00 $5,000.00 8% 25 ? $4,500.00 $1,000.00 5% 20 ? $780.00

Essentials Of Investments
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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### Bond Investment Table This table provides information about various bond investments, highlighting key financial metrics such as Par Value, Coupon Rate, Years to Maturity, Yield to Maturity (currently unspecified), and Price. | Par Value | Coupon Rate | Years to Maturity | Yield to Maturity | Price | |-----------|-------------|-------------------|-------------------|----------| | $1,000.00 | 9% | 15 | ? | $790.00 | | $1,000.00 | 7% | 25 | ? | $600.00 | | $5,000.00 | 8% | 25 | ? | $4,500.00| | $1,000.00 | 5% | 20 | ? | $780.00 | ### Explanation - **Par Value**: The face value of the bond. - **Coupon Rate**: The annual interest rate paid by the bond. - **Years to Maturity**: The remaining time until the bond's principal is repaid. - **Yield to Maturity**: This is not provided in the table and requires calculation based on the bond's price, par value, coupon interest rate, and years to maturity. - **Price**: The current market price of the bond. This table can be used to analyze bond investments, assess their market value, and evaluate potential returns by determining the missing Yield to Maturity values.
Transcribed Image Text:### Bond Investment Table This table provides information about various bond investments, highlighting key financial metrics such as Par Value, Coupon Rate, Years to Maturity, Yield to Maturity (currently unspecified), and Price. | Par Value | Coupon Rate | Years to Maturity | Yield to Maturity | Price | |-----------|-------------|-------------------|-------------------|----------| | $1,000.00 | 9% | 15 | ? | $790.00 | | $1,000.00 | 7% | 25 | ? | $600.00 | | $5,000.00 | 8% | 25 | ? | $4,500.00| | $1,000.00 | 5% | 20 | ? | $780.00 | ### Explanation - **Par Value**: The face value of the bond. - **Coupon Rate**: The annual interest rate paid by the bond. - **Years to Maturity**: The remaining time until the bond's principal is repaid. - **Yield to Maturity**: This is not provided in the table and requires calculation based on the bond's price, par value, coupon interest rate, and years to maturity. - **Price**: The current market price of the bond. This table can be used to analyze bond investments, assess their market value, and evaluate potential returns by determining the missing Yield to Maturity values.
**Yield to Maturity:** Determine the yield of each of the following bonds, assuming interest (coupon) is paid semiannually. --- **Question:** a. What is the yield of the following bond if interest (coupon) is paid semiannually? (Round to two decimal places.) **Bond Details:** - **Par Value:** $1,000.00 - **Coupon Rate:** 9% - **Years to Maturity:** 15 - **Yield to Maturity:** [To be calculated] - **Price:** $790.00 **Explanation:** This table provides information needed to calculate the yield to maturity for a bond. The columns include the par value, coupon rate, years to maturity, the yield to maturity (which needs to be calculated), and the current price of the bond.
Transcribed Image Text:**Yield to Maturity:** Determine the yield of each of the following bonds, assuming interest (coupon) is paid semiannually. --- **Question:** a. What is the yield of the following bond if interest (coupon) is paid semiannually? (Round to two decimal places.) **Bond Details:** - **Par Value:** $1,000.00 - **Coupon Rate:** 9% - **Years to Maturity:** 15 - **Yield to Maturity:** [To be calculated] - **Price:** $790.00 **Explanation:** This table provides information needed to calculate the yield to maturity for a bond. The columns include the par value, coupon rate, years to maturity, the yield to maturity (which needs to be calculated), and the current price of the bond.
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