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In November 2014 you purchase a three-year U.S. government bond. The bond has an annual coupon rate of 4.25%, paid semiannually. If investors demand a 0.965% APR, what is the price of the bond?
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- In November 2016 you purchase a 4 year US Government bond. The bond has an annual coupon rate of 6.25%, paid semi-annually. If investors demand a 0.950% semiannual return, what is the price of the bond? Select one: a. 55000 b. 1210 c. 430 d. 70In October 2010, you purchased a French government bond for €100 (face value) which pays a 1% coupon (nominal interest rate) every year until 2020. Today, in October 2014, similar bonds are issued at a 2% interest rate. What is the value of your bond today?In January 2008, you purchased a XYZ bond with 9 years until maturity. The bond has an annual coupon rate of 9% and pays coupons semiannually (the first coupon will be paid in June 2008). It has a par value of $1,000 (if you need to calculate the semiannual return based on annual return, you can simply divide the annual return by 2). (a).What's the price of the bond in January 2008 with annual YTM of 8%. N= , PMT= , i= %, FV= , therefore, the price of the bond in January 2008 is (keep two decimals) $ (b). In 2008-2009, you received four coupons, first in June 2008 and last in December 2009. Assume the market yield dropped to 7% (annual rate) in 2008 and 2009 after you purchased the bond. By considering reinvestment risk, what is the future value of four coupons at the end of 2009 (December 2009)? N= , PMT= , i= % (keep two decimals), PV= , therefore, the future value of four coupons at the end of 2009 is (keep two decimals) $ (c). You experienced a huge loss during…
- 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.The closing price of a U.S. Treasury bond with a face value of $1400 is quoted as 105.45 points, for a current yield of 3.7%. If you buy this bond, how much annual interest will you receive? Make sure your final answer is in a statement form. Show all your math formula/setun math work, and your answer in the space below.A federal government bond with a 16-year maturity and an annual coupon rate of 10% (coupons are paid semi-annually) currently trade on the basis of a yield to maturity of 8%. You decide to buy this bond now. You intend to resell it in exactly 5 years, and you believe that it will then trade on the basis of a yield to maturity of 11%. What return (effective annual) do you hope to achieve on this investment if you anticipate reinvesting the coupons received at the rate of 8% nominal compounded semi-annually?
- Suppose that we expect $1 million in 3 months and that we want to invest it for a period of 6 months. We also want to set today the rate at which we can invest this money. It is possible to recreate the same result as a forward rate agreement by taking a long position in a 3-month zero-coupon bond and a short position in a 9-month zero-coupon bond True FauxA coupon - paying government bond B with a face (par) value of 876 euros makes annual coupon payments at the end of each year and has a coupon rate of 2.8 percent per year. The price today of this bond is 876 euros. The risk - free yield curve is flat. The first coupon of this bond will be paid in exactly 1 year from now and in the morning. You consider a forward contract that delivers one bond B in exactly 1 year from now in the afternoon, i.e. right after the first coupon has been paid out to bondholders. What must be the no- arbitrage delivery (forward) price in this forward contract initiated today?The company SunInc wants to launch a new product and therefore needs to raise new financing. SunInc issues a bond with a face value of EUR 1000 and a maturity of 5 years. The coupon rate is EUR 45 and the payment annually. What is the yield to maturity? Please also explain how you calculated it.
- Suppose the U.S. Treasury offers to sell you a bond for $3,000. No payments will be made until the bond matures 15 years from now, at which time it will be redeemed for $5,600. What interest rate would you earn if you bought this bond at the offer price?Consider a government bond that pays coupon semi-annually on 15 February and 15 August each year, where the annual coupon rate is 7%. The face value of the bond is $100 and the bond is redeemable at par on 15 August 2030. If the current date is 27 March 2021 and the bond yield is quoted as 7.5% per annum compounded semi-annually, calculate the market price (which is also known as the clean price) with the help of the RBA formula.A government bond has coupon yield 10.9%, face value of 4000 EUR, and maturity in 2026. The coupons are paid yearly. Today is 2022, and we just received a coupon. The government yield curve for time-to-maturity 4 years shows a yield of 5.0%. 1. What is the fair price of the bond today? 2. What is the duration of the bond?