A few years ago, you paid $10,000 to buy a corporate bond with a face value (maturity value) of $10,000 that has a coupon rate of 4% payable semi-annually (pays $200 every 6 months). If the bond matures in 10 years, how much is it worth today if the interest rate for similar bonds is 6% compounded semi-annually? A) $7002.52 B) $5,734.90 C) $8,468.28 D) $2,561.26 E) $8,512.25

Ray Co.’s bonds, maturing in 3 years, pay 8 percent interest on a $1,000 face value. Interest is paid once per year. If your required rate of return is 8 percent, what is the value of the bond? Now assume that the required rate of return increased to 9%. Would you recommend investors to buy the bond? What can you conclude about the relationship between bond prices and interest rates? Assume that the modified duration of this bond is 2.60 years. If the market yield changes by 2%, how much change will there be in the bond's price in %

You tell your broker you want to buy a 20-year government bond. He has one for sale that pays a 5% coupon. The going rate for a typical 20-year Treasury is 7.5%. Assume a Par Value of $100. Shortly after you buy the bond, the YTM on 20-year bonds rose to 9.5%. How much money did you lose? $24.92 $14.17 $14.28

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You just bought a newly issued bond which has a face value of $1,000 and pays its coupon once annually. Its coupon rate is 6%, maturity is 20 years and the yield to maturity for the bond is currently 8%. Suppose that one year after you bought the bond, the yield to maturity of the bond declines to 7%. Find the (before-tax) total dollar return (dollar returns from the coupon payment and capital gains) for the one-year investment period.

Assume that Beach Inc. has an issue of 20-year $1,000 par value bonds that pay 7% interest, annually. Further assume that today's required rate of return on these bonds is 5%. How much would these bonds sell for today?

Consider a bond issued by MGM Inc. exactly two years ago. At that time the bond’s time to maturity was 30 years. The bond pays semiannual coupons with the coupon rate of 6% per year. The face value of the bond is $1000. a. What is the bond’s price today, if today’s market interest rate for bonds of comparable maturity and default risk is 8% per year?  b. You would like to speculate and believe that tomorrow the market interest rate for comparable bonds would decrease to 5%, would you buy or sell short this bond today?  c. Suppose that exactly two years from today the price of the bond will be $900, what is the annual YTM at that time?  Please explain without using excel

A firm has some $1,000 par value bonds outstanding that pay a 12 percent interest rate. The bonds pay interest yearly and have 10 years until they mature.  If bonds that bear similar risk currently earn 8 percent, how much will the firm's bond sell for today? A)  $1,000 B)  $805.20 C)  $851.50 D)  $1,268.20

A government bond pays coupons 11 times a year at an annual rate of 7.5%, has a face value of $1,500, and matures in 11 years. If the current market interest rate is 8.6% compounded annually (i.e., this is an effective rate), 1. What is the periodic market interest rate? (i.e., the rate every 1 th of a year) % (Give answer as a percentage to 6 decimal places) 2. What is the coupon amount paid each time? CAN $ (Give answer to 4 decimal places) 3. What is the current market price of the bond? $ (Give answer to 4 decimal places)

2. You paid $5,000 to buy a Canadian Tire bond with a face value (maturity value) of $ 5,000 that matures in 30 years and has a coupon rate of 4% payable semi -annually. (a) Calculate t he semi -annual coupon payment.  ANSWER: You sell the bond in 7 years, when the interest rate on similar bonds is j 2 = 5.4% . (b) How many coupons (payments) are left?  ANSWER: (c) How much is your expected gain or loss on the sale of the bond?   B/E P/Y C/Y N I/Y PV PMT FV