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 $104 per $100 of face value. What is the yield to worst of this bond when it is released? OA. 1.35% OB. 0.90% OC. 0.77% OD. 1.54%

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 $104 per $100 of face value. What is the yield to worst of this bond when it is released? OA. 1.35% OB. 0.90% OC. 0.77% OD. 1.54%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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a $1000 face value bond has a 9.0% coupon and pays interest semiannually. The bond matures in 2 yeas and has a yield to maturity of 6.5%. what is the Macaulay duration? *Please show work, DO NOT USE EXCEL*
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A 12% bond of Alpha Company with 15 year to maturity is selling in the market for $955, it has a $1,000 par value and pays interest annually. a. Calculate the both bond's yield to maturity (YTM).b. If your required rate of return is 12% would you buy this bond or not.b. Describe the relationship between the coupon rate and yield to maturity and market value of a bond.
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What is the Yield to Maturity (YTM )for a $1,000 par value bond selling on the market priced at $1,120 that matures in 6 years and has the annual coupons rate at 12%? Select one: a. 8.5 % b. 9.4 % c. 12.% d. 13.2 %
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What is the coupon rate if a two-year $10,000 bond with semiannual coupons and a price $9636.67 if it has a yield to maturity of 6.9%? a. 5.909% b. 6.894% c. 4.924% d. 3.939%
A bond pays 10% semi-annual coupons with a face and redemption value of 1000. The bond can be redeemed on an coupon date between 12 and 15 years (inclusive) from the issue date. 1. Find the price payed at issue if investment has a minimum annual effective yield of 8%. Use P = Fr an i + Cv^n Show work

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