23. Rafael bought a 10-year 1,000 par value bond for a price of 1,025. The bond is callable in 6 years at par. The purchase price guarantees a yield of at least 5% convertible semi-annually Calculate the amount of each semi-annual coupon. A) 54.93 B) 53.24 C) 52.82 D) 27.44 E) 26.60
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- 64. You plan to buy a $1,000 face value 10-year bond that earns $60 in interest every six months. How much should you be able to pay for this bond if your nominal annual necessary rate of return is 10% with semiannual compounding? a. $ 826.31b. $1,086.15c. $ 957.50d. $1,431.49e. $1,124.62a. 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___%You intend to purchase a 10-year, $1,000 face value bond that pays interest of $60 every 6 months. If your nominal annual required rate of return is 10 percent with semiannual compounding, how much should you be willing to pay for this bond? Select one: O a. $1,124.62 O b. $1,086.15 O c. $ 957.50 O d. $826.31 O e. $1,032.20
- A P5000.00 debenture bond that matures in 10 years pays P150.00 every three months. If an investor who bought the bond computed a nominal return of 10% compounded quarterly, determine a) the bond rate; b) the bond’s purchase price. (Ans. 12%; P5627.57)An investor purchases a 20-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what is the current market value of the bond? A) $828. B) $893. C) $1,000. D) $1,686. *PV of $1 ordinary annuity is 17.15909: n = 40; i = 5% **PV of $1 is 0.14205: n = 40; i = 5% O A O B18. How much can be paid for a P 50,000, 10% bond, with interest paid semiannually, if the bond matures 12 years hence? Assume that the purchaser will be satisfied with 8% nominal interest compounded semiannually? D. P 75,620 A. P 57,620 B. P 75,260 C. P 57,720 19. A $50,000 bond has a maturity date of six years from now. The bond interest rate is 6% per year payable semiannually. At a market interest rate of 4% per year payable semiannually, the present worth of the bond is closest to: D. $55,288 A. $41,695 B. $44,291 C. $52,341 20. A 6%, $10,000 bond has interest payable annually. The bond will mature 10 years from now. At what market interest rate will the present worth of the bond be $10,000? A. At an interest rate less than 6% per year C. 6% per year D. At an interest rate greater than 7%/year B. 6% per year compounded semiannually 21. A $10,000 municipal bond has an interest rate of 6% per year, compounded semiannually. The bond will mature in 10 years. If the market interest…
- You intend to purchase a 9-year, $1,000 face value bond that pays interest of $65 every 6 months. If your nominal annual required rate of return is 11.6 percent with semiannual compounding, how much should you be willing to pay for this bond? $1,106.94 $1,076.94 $1,086.94 $1,096.94 $1,066.9418. Assume that a 15-year, $1,000 face value bond pays semi-annual interest of $30.00. If an investor requires(Market interest rate) a simple annual rate of return of 8 percent, how much should the investor be willing to pay for this bond? (Round the answer to two decimal places.) O $827.08 O $572.03 O $1,358.24 O $835.81 O $1,120.71Q) 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.
- A bond promises to pay you $7,000.00 in 10 years. If you are able to earn 6 percent on securities of equal risks, what would be the present value of the Bond? (to the nearest dollar) Select one: a. $3,589 b. $3,909 c. $3,727.00 d. $4,200A $3000, 7.5% bond (payable semi-annually) is redeemable at par in 2 years and 6 months. If the bond is purchased to yield 8.1% compounded semi-annually, determine the purchase price of the bond. Draw a timeline in your notes to help you practice!An 8%, P1,000 bond issued to yield 10% has 6 years remaining in its term. The bond pays interest annually; the next interest payment is due on year from today. What is the issuer’s carrying amount of the bond using the interest method of amortizing bond discount and premium? A. 913 B. 633 C. 667 D. 819
