A $12,500 bond that has a coupon rate of 5.60% payable semi-annually and maturity of 5 years was purchased when the yield was 4.20% compounded semi-annually. What was the book value of the bond after 5 payments? $0.00 Round to the nearest cent
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- Yield to Maturity and Yield to Call Arnot International’s bonds have a current market price of $1,200. The bonds have an 11% annual coupon payment, a $1,000 face value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (call price = $1,090). What is the yield to maturity? What is the yield to call if they are called in 5 years? Which yield might investors expect to earn on these bonds, and why? The bond’s indenture indicates that the call provision gives the firm the right to call them at the end of each year beginning in Year 5. In Year 5, they may be called at 109% of face value, but in each of the next 4 years the call percentage will decline by 1 percentage point. Thus, in Year 6 they may be called at 108% of face value, in Year 7 they may be called at 107% of face value, and so on. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firm to call the bonds?A $85,000 bond with a coupon rate of 7.50%, payable semi-annually, is redeemable in 11.5 years. What was the purchase price of the bond, when the yield rate was 4.00% compounded semi-annually?6. A $3,000 bond that has a coupon rate of 6.40% payable semi- annually and maturity of 6 years was purchased when the yield was 5.00% compounded semi- annually. What was the book value of the bond after 9 payments? Round to the nearest cent
- What is the duration of a bond with annual payments of 6% coupon rate, $1,000 par value, 7 years to maturity, yielding 5.25% ? 6.11 years 5.72 years 7 years 6.15 years 5.94 yearsA $6,000 bond that carries a 4.00% coupon rate payable semi-annually is purchased 7 years before maturity when the yield rate was 4.50% compounded semi-annually. a. Calculate the purchase price of the bond. $ Round to the nearest cent b. What is the amount of discount or premium on the bond? (click to select) amount is(d) A RM1,000 callable bond with 9% coupons payable semi-annually was redeemed for RM1,100. The bond was bought for RM918 to yield a nominal rate of 10% convertible semi-annually. Calculate the number of years the bond was held. Provide your answer to the nearest integer.
- A $40,000, 7.50% bond redeemable at par, with annual coupon payments, is purchased 6 years before maturity to yield 4.00% compounded annually. a. What was the purchase price of the bond? $0.00 Round to the nearest cent b. What was the amount of discount or premium on the bond? amount is $0.00Harrimon Industries bonds have 5 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 8%. a. What is the yield to maturity at a current market price of 1. $802? Round your answer to two decimal places. % 2. $1,049? Round your answer to two decimal places. % b. Would you pay $802 for each bond if you thought that a "fair" market interest rate for such bonds was 13%-that is, if rd = 13% ? I. You would not buy the bond as long as the yield to maturity at this price is less than the coupon rate on the bond. II. You would buy the bond as long as the yield to maturity at this price is greater than your required rate of return. III. You would buy the bond as long as the yield to maturity at this price is less than your required rate of return. IV. You would buy the bond as long as the yield to maturity at this price equals your required rate of return. V. You would not buy the bond as long as the yield to maturity at this price is…