Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A bond sells for $1000 and has a coupon rate of 9.04%. What is the bond's yield?
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- Consider a bond that has a life of 2 years and pays a coupon of 10% per annum (with semiannual payments); the yield is 5% per annum with semiannual compounding.(a) What is the bond’s price?(b) What is the bond’s duration?(c) Suppose that the bond price is the one you computed in part (a) and that the 6M, 12M, and 18M zero rates are respectively 4.2%, 4.8% and 5.6% per annum. What is the 2Y zero rate assuming all rates are quoted with semiannual compounding?arrow_forwardWhat is the yield to maturity on a bond that has a price of $1,700 and a coupon rate of 12% annually for 6 years at the end of which it repays the principal of $1000? Is the bond selling at premium, at par, or at discount? How can you tell? (Using financial calculator)arrow_forwardConsider the following bonds: •Bond A: A 2-year zero-coupon bond with a face value of $100 and 6% YTM. •Bond B: A 2-year par-value bond with a face value of $100 and 6% coupon rate. *Bond C: A 2-year par-value bond with a face value of $100 and 7% coupon rate. Suppose the yield curve shifts upwards by one percent. Which bond among bonds A, B, and C will experience the largest percentage price change? Which will have the lowest percentage price change? O a. Bond A; Bond C O b. Bond A; Bond B O c. Bond B; Bond C O d. Bond C; Bond Barrow_forward
- For a $1 bond the coupon rate is 120% of the yield rate and the premium is p. For another $1 bond with the same number of coupons and the same yield rate, the coupon rate is 80% of the yield rate. Express the price of the second hond as a function of p. Price of the second bond = P.arrow_forwardA bond's semi-annual coupon is $52.9. What is the coupon rate?arrow_forward6.arrow_forward
- helparrow_forwarda bond is selling for 850 and pays coupon of 0.09 what is the current yielsarrow_forwardSuppose a 10-year, $1000 bond with a coupon rate of 8.4% and semiannual coupons is trading for $1035.64. a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? b. If the bond's yield to maturity changes to 9.4% APR, what will be the bond's price?arrow_forward
- Suppose a 10-year, $1,000 bond with a coupon rate of 8.9% and semiannual coupons is trading for $1,035.75. a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? b. If the bond's yield to maturity changes to 9.9% APR, what will be the bond's price? a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? The bond's yield to maturity is %. (Round to two decimal places.)arrow_forwardConsider a coupon bond that has a par value of $1,000 and a coupon rate of 8%. The bond is currently selling for $1,008.98 and has 2 years to maturity. What is the bond's yield to maturity (YTM)? The yield to maturity isarrow_forwardCalculate the current yield on the described bond. A $500 Treasury bond with a coupon rate of 3.2% that has a market value of $425 The current yield is %. (Round to two decimal places as needed.)arrow_forward
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