Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- It is now January 1, 2018, and you are considering the purchase of an outstanding bond that was issued on January 1, 2016. It has a 9% annual coupon and had a 20-year original maturity. (It matures on December 31, 2035.) There is 5 years of call protection (until December 31, 2020), after which time it can be called at 109-that is, at 109% of par, or $1,090. Interest rates have declined since it was issued, and it is now selling at 114.12% of par, or $1,141.20. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. %What is the yield to call? Do not round intermediate calculations. Round your answer to two decimal places. %arrow_forwardCommonstealth Bank issued a bond that pays a 7.20% coupon quarterly and matures at the end of September 2036. If the current market rate for similar bonds is 6.50%, what is the bond price at the end of October 2021? Show your workings and round your final answers to two decimal places.arrow_forwardWhat is the calculated quoted futures price for a September 2022 Treasury bond futures contract given that the date is July 30, 2022? The associated bond is a 13% coupon bond set for delivery on September 30, 2022. The bond makes coupon payments twice a year, specifically on February 4 and August 4. The interest rate, compounded semiannually, is a steady 12% annually. The bond's conversion factor is 1.5, and the current quoted price for the bond stands at $110.arrow_forward
- You bought a newly issued 10-year, $1,000 par value, 5.50% coupon bond (with semiannual coupon payments) on May 1, 2023. You decided to check the value and yields on the bond annually, so that you can keep track of your wealth. Your first check was to be done on May 1, 2024. On April 15, 2024, the yield to maturity for the bond changed to 5.20%. For your two year anniversary of owning the bond (May 1, 2025), calculate the bond's total yield for the second year of ownershiparrow_forwardIt is now January 1, 2021, and you are considering the purchase of an outstanding bond that was issued on January 1, 2019. It has a 9.5% annual coupon and had a 20-year original maturity. (It matures on December 31, 2038.) There is 5 years of call protection (until December 31, 2023), after which time it can be called at 108—that is, at 108% of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at 120.08% of par, or $1,200.80. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. _____ % What is the yield to call? Do not round intermediate calculations. Round your answer to two decimal places. ____ %arrow_forwardA bond that settles on June 7, 2019, matures on July 1, 2039, and may be called at any time after July 1, 2029, at a price of 156. The coupon rate on the bond is 7.2 percent and the price is 169.00. What are the yield to maturity and yield to call on this bond? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Yield to maturity Yield to call % %arrow_forward
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