Suppose a U.S. government bond promises to pay $3.000 four years from now. If the going interest rate on 4-year government bonds is 5%. how much is the bond worth today? PV = FV, /1 + 1
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- Suppose a U.S. government bond promises to pay $2.249.73 three years from now. If the going interest rate on 3-year government bonds is 4%, how much is the bond worth today? PV = FV,/1 + 1NSuppose a U.S. government bond will pay $1,000 three years from now. If the going interest rate on 3‐year government bonds is 4%, how much is the bond worth today?Suppose a U.S. government bond promises to pay $3,000 three years from now. If the going interest rate on a 3-year government bond is 5%, how much is the bond worth today?
- Suppose a U.S treasury bond will pay $4,150 five years from now. If the going interest rate on 5-year treasury bond is 4.25%, how much is the bond worth today?Suppose a pure discount State of New York bond will pay $1,000 ten years from now. If the going interest rate on these 10-year bonds is 3.5%, how much is the bond worth today?A US government bond in the amount of $1,000 will mature in six years, has no coupon payments, and carries an interest rate of 8%. What is the value of this bond today?
- Suppose a State of New York bond will pay $1,000 ten years from now. If the going interest rate on these 10-year bonds is 5.0%, how much is the bond worth today?Suppose government economists have forecasted one-year T-bill rates for the following two years. They are as follows: Year 1-year rate 1 4.50% 2 5.00% At what annual required rate of interest, bond investors would be willing to purchase a 2-year T-bond now? 9.725% or higher. 4.75% or higher. 4.875 or lower. 9.50% or lower.4. Suppose the U.S. Federal Reserve offers a bond for $635.20 at 8 years to maturity. You will not have to issue payments until the maturity date, at which time you will receive $950. Calculate the interest rate if you decide to buy it. Determine the interest rate if you manage to buy it at a price of $555.
- Suppose the U.S. Treasury offers to sell you a bond for $687.25. No payments will be made until the bond matures 5 years from now, at which time it will be redeemed for $1,000. What interest rate would you earn if you bought this bond at the offer price?a) At 21 February 2018, the US Government could borrow at an annual 10-year yield of 2.89%. At that yield, how much were financial markets paying for the right to receive $100 from the US Government 10 years later? (b) Suppose a 5-year zero-coupon bond (??? = $100) issued by the US government is currently trading at $90. What is the annual yield an investor would receive for buying such a bond and holding it to maturity? (c) Suppose the US Federal Reserve (the US Central Bank) wants to lower longer-maturity yields. Briefly explain the process (known as Quantitative Easing) it could use to achieve this.3. The U.S. Government has a 20-year bond that matures 20 years from now and has a face value of $1,000. The bond has a coupon rate of 3.1% per year, paid semiannually. The yield on the bond is 8%. If coupons are reinvested at 3.6% per annum, then how much interest is earned on reinvested coupons over the life of the bond? Calculate the interest as a percentage of the total cash flows received by the bondholder. What is the amount of interest earned on reinvesting the coupons? $ (Round to the nearest cent.) What percentage of the total cash flows received by the bondholder is the interest earned on the reinvested coupons? % (Round to two decimal places.)