You want to form a bond portfolio that pays $100 every six months, for the next year. That is, $100 in 0.5 years and $100 in 1 year. To achieve this goal, you will purchase Bonds A and B, which have a face value of $100 and pay semi-annual coupons. The following information is available: Bond A • Coupon rate (APR): 4.3% • Maturity: 1 year Bond B • Coupon rate (APR): 9.5% • Maturity: 1 year Calculate the number of units you must buy of Bond B to achieve your goal. Express your answer as a number with two decimals. E.g. If your answer is 102.544, then enter it as 102.54

You want to form a bond portfolio that pays $100 every six months, for the next year. That is, $100 in 0.5 years and $100 in 1 year. To achieve this goal, you will purchase Bonds A and B, which have a face value of $100 and pay semi-annual coupons. The following information is available: Bond A • Coupon rate (APR): 4.3% • Maturity: 1 year Bond B • Coupon rate (APR): 9.5% • Maturity: 1 year Calculate the number of units you must buy of Bond B to achieve your goal. Express your answer as a number with two decimals. E.g. If your answer is 102.544, then enter it as 102.54

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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You are employed by an investment bank to estimate the value of a coupon-paying bond with the following features. It has a face value of $100,000, pays quarterly coupons at a rate of 10% p.a. and the market required yield to maturity is 8% p.a. compounding quarterly. There is one full quarter until the next payment will be received and the bond matures in 4 years. Which of the following is closest to the market value of the bond? Group of answer choices A) $106,789 B) Need more information to answer the question C) $105,288 D) $93,473 E) $94,871
Calculate the duration (and price) of a bond with the following characteristics: A semi-annual payment bond with a $1,000 face value, a 4,5% coupon rate, a 7.8% YTM, and 8 years to maturity. Show your table of calculations or show Excel inputs if using the Excel commands.
Calculate the duration (and price ) of a bond with the following characteristics: A semi - annual payment bond with a $1,000 face value, a 4.5% coupon rate, a 7.8% YTM, and 8 years to maturity. Show your table of calculations or show Excel inputs if using the Excel commands.
Solve this problem
You purchase a bond with an invoice price of $1,170. The bond has a coupon rate of 7.2 percent, and there are 2 months to the next semiannual coupon date. What is the clean price of the bond? Assume a par value of $1,000.
You purchase a bond with an invoice price of $1,047. The bond has a coupon rate of 10 percent, and there are 4 months to the next semiannual coupon date. What is the clean price of the bond? Enter the answer with 2 decimals (e.g. 954.23).
Solve this one
You have purchased a bond for $973.02. The bond has a coupon rate of 6.4%, pays interest annually, has a face value of $1,000, 4 years to maturity, and a yield to maturity of 7.2%. You expect that interest rates will fall by .3% later today. a) Calculate the bond’s macauly duration b) Use the modified duration to find the approximate percentage change in the bond's price. Find the new price of the bond from this calculation. c) Suggest how the estimate in part (b) can be improved.
Assume that a 10-year bond pays interest of $55 every six months and will mature for $1,000. Also assume that the yield to maturity on this bond is currently 12.34 percent. Given this information, determine the expected total dollar price appreciation for this bond if you buy it today, hold it for 2 ½ years, and interest rates go down to 11.47 percent by the time you sell the bond. Answer choices: $39.56 $45.80 $59.51 $36.69 $52.57 Please answer fast I give you upvote
A bond with Tk.1,000 par value and 8 percent annual interest (coupon) rate will mature in 3 years. The bond is selling for Tk.970. Calculate the current yield on the bond. need answer asap
Calculate the YTM based on the information provided and explainthe difference between the Yield to Maturity rate and the originalcoupon rate. YTM Bond Details: A bond is currently selling for $850 with 15 years until it matures.The bond has a current coupon rate of 6% and makes paymentssemi-annually. You purchase the bond today 1/1/2023 as yoursettlement date and you are interested in knowing what the YTMwill be. **Note, when calculating the YTM the bond price (% of par)and face value (% of par) will not be percentages, please usenumbers for their respective section. The Yield Calculation is alreadybuilt into excel, all you have to do is type is =yield.
Consider a bond with one year remaining to maturity, a $1,000 face value, an 8 percent coupon rate (paid semi-annually), and an interest rate (either required rate of return or yield to maturity) of 20 percent. What is the duration of the bond?

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