A 4 % coupon has a maturity of two years and a yield to maturity of 6%. For the first year, interest rates stay at 6% and thereafter they change to 4%. Which of the following is closest to the realized yield on the bond at its final maturity?A. 5.95%B. 5.96%C. 6.22%
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A 4 % coupon has a maturity of two years and a yield to maturity of 6%. For the first year, interest rates stay at 6% and thereafter they change to 4%. Which of the following is closest to the realized yield on the bond at its final maturity?A. 5.95%B. 5.96%C. 6.22%
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- Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may be called in 4 years at a call price of 1,060. The bond sells for 1,100. (Assume that the bond has just been issued.) a. What is the bonds yield to maturity? b. What is the bonds current yield? c. What is the bonds capital gain or loss yield? d. What is the bonds yield to call?A bond with a face value of $1,000 has 10 years until maturity, has a coupon rate of 5.2%, and sells for $1,105. a. What is the current yield on the bond? (Enter your answer as a percent rounded to 2 decimal places.) b. What is the yield to maturity if interest is paid once a year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places.) c. What is the yield to maturity if interest is paid semiannually? (Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places.)Consider a bond with a duration of 8 years having a yield to maturity of 8 percent, and interest rates are expected to rise by 50 basis points. What is the percentage change in the price of the bond? a. 3.85 percent b. -4.02 percent c. 3.45 percent d. -3.45 percent e. -3.85 percent
- Calculate the duration of a $1,000, 6% coupon bondwith three years to maturity. Assume that all marketinterest rates are 7%Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): The timeline starts at Period 0 and ends at Period 20. The timeline shows a cash flow of $ 20.72 each from Period 1 to Period 19. In Period 20, the cash flow is $ 20.72 plus $ 1,000. Period0121920 Cash Flows$20.72$20.72$20.72$20.72+$1,000 a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value?A $1,000 bond has a coupon of 6 percent and matures after ten years. a. what would be the bond's price if comparable debt yield 8 percnt? b. what would be the price if comparable debt yield 8 percent and the bond matures after five years? c. why are the prices different in a and b? d. what are the current yields and the yields to maturity in a and b?
- Bond P is a premium bond with a coupon rate of 8 percent. Bond D is a discount bond with a coupon rate of 3 percent and is currently selling at a discount. Both bonds make annual payments, have a YTM of 5 percent, and have eight years to maturity.1. What is the current yield for bond P and D?2. If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond P and bond D?1. What is the yield to maturity on the following bonds; all have a maturity of 10 years, a face value of 2000, and a coupon rate of 4 percent (paid semiannually). The bond's current prices are: a. $1,180 b. $ 2,400 c. Explain the relationship between yield to maturity and bond prices.A)calculate the value of a bond that matures in 12 years and has a 1000 par value . the annual rate is 8% and the markets required yield to marurity on a comparable risk bond is 12% b) what will be the value of the bond be if the payments are semi annual? c) explain the four relationships of a corporate bond.
- A 7% annual coupon bond has a maturity of three years and a yield to maturity on an annual basis of 8%. For the next two years, interest rates stay at 8% and thereafter they change to 7%. Which of the following is closest to the amount of reinvestment income on the bond to its final maturity if the par value of the holding is $1,000. A. $15.04B. $15.79C. $16.551. Consider that a bond has a par value of 70,000 and pays an 8% coupon rate at the end of each year with 6 years remaining until maturity. Assume that the prevailing annualized yield on other bonds with similar characteristics is 9%. What is the price of the bond using method 1Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): The timeline starts at Period 0 and ends at Period 50. The timeline shows a cash flow of $ 20.38 each from Period 1 to Period 49. In Period 50, the cash flow is $ 20.38 plus $ 1,000. Period. Cash Flows 0 1 $20.38 2 $20.38 49. $20.38 50. $20.38 + 1,000 a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value?