Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- A coupon bond of 8.4 percent with 18 years left to maturity is priced to offer a 6.70 percent yield to maturity. You believe that in one year, the yield to maturity will be 7.4 percent. (Assume interest payments are semiannual.) What would be the total return of the bond in dollars? What would be the total return of the bond in percentage?arrow_forwardA 2-year maturity bond with face value of $1,000 makes annual coupon payments of $88 and is selling at face value. What will be the rate of return on the bond if its yield to maturity at the end of the year is: Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. 6% b. 8.8% c. 10.8% Rate of Return % % %arrow_forwardA Treasury STRIP is a zero-coupon US Treasury bond. If the STRIP's yield-to-maturity is 2.5%, par value is $1,000, and 7 years remain until maturity, what is the bond's price today? Use a semi-annual compounding period in your calculations. Enter your answer as a positive number rounded to the nearest penny.arrow_forward
- A 2-year maturity bond with face value of $1,000 makes annual coupon payments of $116 and is selling at face value. What will be rate of return on the bond if its yield to maturity at the end of the year is: Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. 6% b. 11.6% c. 13.6% Rate of Return % % %arrow_forwardSuppose you purchase a zero coupon bond with a face value of $1000, maturing in 20 years, for $213.20. zero coupon bond pay the investor the face value on the maturity date. What is the implicit interest in the first year of the bond's life ?arrow_forwardYou are purchasing a 10-year, zero–coupon bond. The yield to maturity is 8.69 percent and the face value is $1,000. What is the current market price? Assume semiannual compoundingarrow_forward
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