A 20-year bond with 8% annual coupons is purchased at a price of P. The face amount of the bond is F. The price assumes an annual effective yield rate of 4%. The change in book value of the bond during the 8th year is equal to 43.24. Calculate P. 2,315 2,470 2,625 2,780. E 3,085 Grade & Review >

(i) Complete the information requested for each of the following $1000 face value, zero coupon bonds assuming semi-annual compounding. Bond Maturity (year) YTM (%) Price at t=0 A 20 12 ? B ? 8 601 350 (ii) Assume that you purchased an 8%, 20-year, $1000 par, semi-annual payment bond priced at $1012.50 with 12 years remaining till maturity. Determine a. Promised yield to maturity b. Yield to call if the bond is callable in three years with 8% premium on par value. c. What would be the price of bond 3 years from now. (iii) Bonds of Francesca Corporation with a par value of $1000 sell for $960, mature in 5 years and have a 7% annual coupon paid semi-annually. Estimate a. Current yield b. Capital Gain Yield c. Promised Yield to maturity d. Realized or horizon yield for an investor with a three year holding period and reinvestment rate of 6% over the holding period. At the end of three years the 7% coupon bonds with 2 year remaining till maturity will sell to yield 7%. (iv) Discuss two…

You purchase a zero coupon bond with 12 years to maturity and a yield to maturity of 4.93 percent. The bond has a par value of $1,000. What is the implicit interest for the first year? Assume semiannual compounding. a.$27.12 b.$26.89 c.$27.82 d.$24.34 e.$26.71

Answer the following.

A. Compute the current price of each of the following bonds (assume $1,000 par value): a. 6 year, 6% quarterly bond; 12% market yield b. 20 year zero coupon bond; 6% market yield c. 10 year, 10% semiannual bond; 8% market yield

A company issues a callable (at par) 20-year, 5% coupon bond with annual coupon payments. The bond can be called at par in one year after release or any time after that on a coupon payment date. On release, it has a price of $103 per $100 of face value. What is the yield to worst of this bond when it is released? O A. 1.55% OB. 2.72% OC. 3.1% QR. 194%

4) A 10 year bond with $50, 000 face value has semiannual coupon rate 4% and semiannual yield rate 2%. Fill out the following amortization table. Principle Outstanding t Payment Interest герaid Balance 1 2 3 12

Given the following spot rates, calculate the value of a 3-year, 6% annual-coupon bond. Spot rates:   1-year: 5% 2-year: 5% 3-year: 6%     A.   $1,001.56   B.   $1,044.73   C.   $1,094.56   D.   $1,114.29   Clear my choice

A corporate bond has a coupon rate of 9%, a yield to maturity of 11.1%, a face value of $1,000, and a market price of $850. Therefore, the annual interest payment is: Select one: a. $90 b. $76.50 C. $111 d. $109

Consider a bond with a modified duration (in years) of 3.2. Coupon rate and yield to maturity are the same. Par value is $1,000. Estimate the percentage change in price for a 200 basis-point increase in interest rates. O A. -5.4% ОВ. -6.4% C. -8.6% OD. 4.8%