(15. Samsung bond has been just issued under th e conditions: 10 years to maturity, coupon rate 7 %, YTM 6%, semi-annual coupon payments. If it i s certain that the interest rate rises to 10% next y ear (one year from today), what will be the correct Dond price change? Assume the face value of the pond to be $1,000. . $165 capital gain . $250 capital gain $250 capital loss $285 capital loss
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- 3. Suppose that you observe the following two bonds being traded, both of which pay coupons annually and have a $100 face value: Bond Coupon Maturity Rate A B 6% 2% 30 years 30 years Price $147.13 $64.47 If the Law of One Price holds, what is the price of a 30-year Annuity that pays $8 per year starting at t = 1?J1. A bond has 12 years until maturity and a coupon rate of 8.2% payable semi-annually; and sells for $1,080. Face value of the bond is $1,000. What is the capital gain yield if you keep the bond for one year? You can assume the market rate is not changing.A one-year zero coupon bond costs $99.43 today. Exactly one year from today, it will pay $100. What is the annual yield-to-maturity of the bond? (1.e., what is the discount rate one needs to use to get the price of the bond given the future cash flow of $100 in one year?) 1.0057 0.0057 2.0057 -0.0057
- 20. A firm wishar to issue a perpetual callable bond, The .rtent interest rate is 9%, Next year, there W a 40% chance that the interest rate will be 5% .d S60% chance that the rate will be 13.3%. The bond is callable at $1,090, and it will be called if the interest rate drops to 5%. What is the bond's value today if the coupon amount is at $100?2:36 a. The value of this bond if it paid interest annually would be $ (Related to Checkpoint 9.4) (Bond valuation) A bond that matures in 15 years has a $1,000 par value. The annual coupon interest rate is 12 percent and the market's required yield to maturity on a comparable-risk bond is 17 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually? ||| = Vol) 1 LTE2 O 4Gl 41% (Round to the nearest cent.)Question #3: Bond Pricing and Bond Return (a) A 20 year $1000 face value coupon bond that pays an coupon rate of 12%. The YTM = 15%. Assume that the coupon payment is paid semi-annually. (b) Suppose that next year, the YTM falls to YTM = 13%. Calculate the new price of the bond from Part (a). [Hint: One year has passed since the bond was initially purchased.] (c) Use your answers from Parts (b) and (c) to calculate the one year holding period return of the coupon bond.
- 18. Suppose you have six year Euro bond with an 8 percent coupon and 8 percent yield. The duration is approximately, D=6 years and the price of the bond is $1000. What is the dollar duration? $46.23 $56.00 $58 $43.23A bond that matures in 10 years has a $1,000 par value. The annual coupon interest rate is 8 percent and the market's required yield to maturity on a comparable-risk bond is 13 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually? Question content area bottom Part 1 a. The value of this bond if it paid interest annually would be $enter your response here.Q4: Consider a bond paying a coupon rate of 10% per year semi-annually when the market interest rate is only 4% per half-year. The bond has three years until maturity. This initial payment is $1000. A: What is find the bond’s price today and 6 months time after the next coupon is paid?
- you You are considering a 15-year $1,000 un par value bund. Its coupon rate is 10% and interest is paid semiannually. If require on "effective" armual interest rate (not a nominal rate) of 9.2025%, how much should you be willing to for pay the bond? 97 clic ve! 62.211711 $801 200 Mon Noo Z 4What is the value of an Orion bond that has a 10 percent coupon, pays interest semiannually, and has 10 years to maturity, if the required rate of return is 12 percent? I $1,200 b. $885.50 c. $895.27 > bUse the following information to answer the questions. Bond A Bond B Face Value 1000 1000 Coupon rate 10% 8% Coupons paid out Semi-annually Quarterly Years to maturity 4 4 Bond price 800 ? Suppose bond A and B have the same YTM. What is the yield to maturity of bond A? What is the price of bond B? What is the current yield of bond B? What is the EAR (effective annual rate) of these two bonds?