A 10-year Circular File bond with face value of $1,000 pays interest once a year of $65 and sells for $972. a. What are its coupon rate and yield to maturity? Note: Do not round intermediate calculations. Enter the coupon rate as a whole percent and the yield to maturity as a percent rounded to 2 decimal places. Coupon rate Yield to maturity % b. If Circular wants to issue a new 10-year bond at face value, what coupon rate must the bond offer? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.

A 10-year Circular File bond with face value of $1,000 pays interest once a year of $65 and sells for $972. a. What are its coupon rate and yield to maturity? Note: Do not round intermediate calculations. Enter the coupon rate as a whole percent and the yield to maturity as a percent rounded to 2 decimal places. Coupon rate Yield to maturity % b. If Circular wants to issue a new 10-year bond at face value, what coupon rate must the bond offer? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.

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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A bond with a coupon rate of 9 percent sells at a yield to maturity of 11 percent. If the bond matures in 12 years, what is the Macaulay duration of the bond? What is the modified duration? Note: Do not round intermediate calculations. Round your answers to 3 decimal places. X Answer is complete but not entirely correct. Macaulay Modified Duration 9.128 X years 8.648 years
es A bond with a coupon rate of 8 percent sells at a yield to maturity of 9 percent. If the bond matures in 10 years, what is the Macaulay duration of the bond? What is the modified duration Note: Do not round intermediate calculations. Round your answers to 3 decimal places. Macaulay Modified Duration years years
A 14-year bond pays semi-annual coupons at j2 = 9% and has a yield rate of j2 = 7.1%. If the book value immediately after the 7th coupon payment is $1038.45, and the book value immediately after the 11th coupon payment is $1034.51, what is the bond's face value? Answer: $ NOTE: Assume the note is NOT redeemable at par.
Bond A has the following terms: Coupon rate of interest (paid annually): 12 percent Principal: $1,000 Term to maturity: Ten years Bond B has the following terms: Coupon rate of interest (paid annually): 6 percent Principal: $1,000 Term to maturity: Ten years What should be the price of each bond if interest rate is 12 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar.Price of bond A: $ Price of bond B: $ What will be the price of each bond if, after four years have elapsed, interest rate is 12 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar.Price of bond A: $ Price of bond B: $ What will be the price of each bond if, after ten years have elapsed, interest rate is 9 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar.Price of bond A: $ Price of bond B: $
Bond P is a premium bond with a 10 percent coupon. Bond D is a 6 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 8 percent, and have five years to maturity. (Assume par value of K1,000)(i) What is the current yield for Bond P and Bond D?(ii) If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond P? For Bond D?(iii)Explain your answers and the interrelationship among the various types of yields.
A 10-year bond has a coupon rate of 6.4% and pays coupons semi-annually. If the required return is 6.69%, how much should you be willing to pay for the bond today? Round to 2 decimal places. Include a dollar sign ($) or percent (%) as appropriate. NOTE: All bonds have a par value of $1000 that is paid at maturity. Answer:
Bond A has the following terms: Coupon rate of interest (paid annually): 12 percent Principal: $1,000 Term to maturity: Ten years Bond B has the following terms: Coupon rate of interest (paid annually): 6 percent Principal: $1,000 Term to maturity: Ten years What should be the price of each bond if interest rate is 12 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar.Price of bond A: $ Price of bond B: $ What will be the price of each bond if, after three years have elapsed, interest rate is 12 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar.Price of bond A: $ Price of bond B: $ What will be the price of each bond if, after ten years have elapsed, interest rate is 9 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar.Price of bond A: $ Price of bond B: $
A bond has a semi-annual coupon payment of $32.4. What is the coupon RATE? Convert to a percent. Round to 2 decimal places. Include a dollar sign ($) or percent (%) as appropriate. (NOTE: the coupon RATE is given annually, yet the coupon PAYMENT is semi-annual.) Answer:
Suppose the current interest rate on a one-year bond is 2% and the current interest rate on a two-year bond is 4%. The term premium on a two-year bond is 1%. According to the expectations hypothesis, what interest rate should we expect on a one-year bond next year? Answer as a percentage to one decimal place and do not include symbols (e.g. $, %, commas) in your answer. Answer:
Calculate the fair present values of the following bonds, all of which pay interest semiannually, have a face value of $1,000, have 12 years remaining to maturity, and have a required rate of return of 11.5 percent. a. The bond has a 7.8 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g. 32.16)) b. The bond has a 9.8 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g.. 32.16)) c. The bond has a 11.5 percent coupon rate. (Do not round intermediate calculations.) a. Fair present value b. Fair present value c. Fair present value
Last year Carson Industries issued a 10-year, 15% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,075 and it sells for $1,180. What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: YTC What is the current yield? What is the expected capital gains (or loss) yield for the coming year? Use amounts calculated in above requirements for calculation, if required. Negative value should be indicated by a minus sign. Round your answer to two decimal places.

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