Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A bank has just issued a 10,000/= par
- What is the market price of this bond?
- If Interest rates remain constant what will be the price of the bond in four years
- If interest rates rise to 12%, what will be the price in four years
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- A zero coupon bond with $1000 face value matures in 5 years. What is the price of the bond today if the yield-to-maturity on similar risk bonds is 12% APR compounded semi-annually?arrow_forward2. See the following and check the relevant PPT Examples if needed. Show your steps. A $1,000 par value bond with 12 years to maturity pays a coupon rate of 6%, annually. The bond's yield to maturity is 6.7% per year. You expect the bond's yield to maturity in three years will be 5.9% per year and you can reinvest the bond's coupon payments over the next three years in short- term securities that p pay 4% per year. What is the expected annual return over the next three years? C 5 Marrow_forwardSuppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1,000, and a coupon rate of 7.0% (annual payme was 6.0%. Assuming the yield to maturity remains constant, what is the price of the bond immediately after it makes its first coupon payment? After the first coupon payment, the price of the bond will be $ (Round to the nearest cent.) KITSarrow_forward
- A zero coupon bond with $1000 face value matures in 10 years. What is the price of the bond today if the yield-to-maturity on similar risk bonds is 12% APR compounded semi-annually?arrow_forwardIf you are issuing a bond that will make an annual (once per year) coupon payment of $30 for 20 years, will return a face value payment of $1000 in year 20, and the going interest rate is 2%, then the bond will fetch roughly $___________ in the market. 1160 1600 1000 1240arrow_forwardA Ford Motor Co. coupon bond has a coupon rate of 6.95%, and pays annual coupons. The next coupon is due tomorrow and the bond matures 36 years from tomorrow. The yield on the bond issue is 6.45%. At what price should this bond trade today, assuming a face value of $1,000? The price of the bond today should be $__________ (Round to the nearest cent.)arrow_forward
- You have a 30-year Treasury of $1,000 face value that pays 4.4% coupons yearly and has 7.5 years left to maturity. The Yield to Maturity (YTM) of this bond is 5.2% per annum. What is its price? Remember, by convention coupons are assumed to be paid twice a year unless otherwise specified.arrow_forwardA bond that matures in 12 years has a $ 1000 par value. The annual coupon interest rate is 12 percent and the market's required yield to maturity on a comparable-risk bond is 16 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?arrow_forwardYou are considering buying a semi-annual coupon bond with a stated coupon rate of 8 % (note that the stated rate is in annual terms). There are 10 years to maturity remaining on it. Your required rate of return is 12.4 % per year, How much should you be willing to pay for this bond? (Round your answer to three decimal places. For example 1.23450 or 1.23463 will be rounded to 1.235 while 1.23448 will be rounded to 1.234).arrow_forward
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