To secure a return of 4%, at what price should a bond be purchased if it is redeemable at P 1,000 in 10 years and plays annual dividends of P 35,00? Ans. P 959.45
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- a. Assuming you purchased the bond for $350 what rate of return would you earn if you held the bond for 25 years until it matured with a value $1000? a. Rate of return____% b. Suppose under the terms of thebond you could redeem the bond in 2024. DMF agreed to pay an annual interest rate of 1.4 percent until the date. How much would the bond be worth at that time? b. Bond value_____ c. In 2024 instead of cashing in the bond for its then current value you decide to hold the bond until it mature in 2043. What annual rate of return will you earn over the last 19 years? c. Rate of return___%What is the market value of Beril Gıda A.Ş.'s bond with a nominal value of USD 12,000, maturity of 5 years and an annual interest payment of 25%, when the desired rate of return is 25%? a) 18000b) 15000c) 12000d) 16000e) 24000You will be paying $8,600 a year In tultion expenses at the end of the next two years. Bonds currently yleld 7%. Q. What is the present value and duration of your obligation? b. What maturity zero-coupon bond would Immunize your obligation? c. Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates immediately Increase to 9%. What happens to your net position, that is, to the difference between the value of the bond and that of your tultion obligation? d. What if rates fall Immediately to 5% ? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D What is the present value and duration of your obligation? (Do not round intermediate calculations. Round "Present value" to 2 decimal places and "Duration" to 4 decimal places.) \table[[,,,],[Present value,,,,,],[Duration,,years,,,]]
- You purchase a 6% $1,000 bond with a term of 5 years and reinvest all interest payments. If interest rates rise to 9% after you purchase the bond, what is the return on your investment in the bond? Assume annual payments/compounding. 6.33% 6.69% 9.00% 6.45%You have just made an investment for GH¢ 747.25. No payments will be made until the investment matures 5 years from now, at which time it will be redeemed for GH¢ 1,000. What interest rate will you earn on this bond? A) 4.37% B) 6.00% C) 3.559% D) 7.00% E) 4.00%The amount of the prospective investor pay for a bond if he desires an 13% return on his investment and the bond will return P1,200 per year for 20 years and P40,000 is the redemption cost. Find the price of the bond: (2 decimal places only, rounded off. if whole number, no need to add .00)
- Q) An $6,000 face-value bond matures in four (4) years and pays 6% per year payable Semiannually An investor wants a 10% return per year compounded Semiannually. How much should the investor pay for the bond? Explain it correctly.(Bond valuation) You own a 10-year, $1,000 par value bond paying 8 percent interest annually. The market price of the bond is $825, and your required rate of return is 12 percent. a. Compute the bond's expected rate of return. b. Determine the value of the bond to you, given your required rate of return. c. Should you sell the bond or continue to own it? ... a. What is the expected rate of return of the 10-year, $1,000 par value bond paying 8 percent interest annually if its market price is $825? % (Round to two decimal places.)What is the approximate price of a bond that matures in two years (T= 2), with a face value of $1000 (F= $1000), and an annual coupon payment of $50 (C = $50), if the interest rate is 6 percent? $1056.67 $1100.00 $876.33 $981.67
- What would you pay for a $100,000 debenture bond that matures in 15 years and pays $5,000 a year in interest if you wanted to earn a yield of: a. 4%? b. 5%? c. 6%?What would you pay for a $210,000 debenture bond that matures in 15 years and pays $10,500 a year in interest if you wanted to earn a yield of: Click here to view factor tables. (a) 3%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answes to O decimal places, e.g. 458,581.) Amount to pay $3. What is the present value of a $20,000 payment you would receive 5 years from now, assuming an annual interest rate of 7%? 4. What is the future value 6 years from now of $15,000 you hold today when the annual interest rate is 4%? 5. What is the current price of a discount bond with a face value of $10,000 and an interest rate of 6%? 1