Answered: A zero - coupon bond has a face value…

A zero - coupon bond has a face value of R10000.it matures in 13years. The yield to maturity is 4.7 % . Assume semi-annual compounding .Calculate the value of the bond.

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

See similar textbooks

Related questions

Q: A bond pays annual interest. Its coupon rate is 10.0%. Its value at maturity is $1,000. It matures…

A: The modified duration of the bond refers to the relationship between the price of the bond and the…

Q: A 5-year government bond has an annual coupon of calculate: a) the price, b) Macaulay duration and;…

A: Price of bond is the present value of the coupon interest payments plus present value of face value…

Q: You can enter into a forward contract for a bond with a maturity in one year months that pays a…

A: We have spot rates, periodic coupon and interest rates. The same can be used to theoretically derive…

Q: Compute the yield to maturity on a bond with a $1000 par value, a coupon rate of 3.75% with…

A: The yield to maturity rate of return realized by holding the bond till the maturity of bond and…

Q: A 10-year semiannual coupon bond with coupon rate of 7% per year is selling to yield 6.5% per year…

A: A compounding period is a time between when interest was last compounded and when it will be added…

Q: Compute the intrinsic value of an 18% coupon, a 4-year maturity bond whose principal will be repaid…

A: Intrinsic value is the present value

Q: Current 1-yr interest rate is 12%. Forward rate during 2nd year is 9% and is expected to rise by…

A: Yield to maturity: It is the rate that an investor earns when security is kept till maturity.

Q: bond, paying semi-annual coupons of 6% per annum, matures in 18 months time, and has a dirty price…

A: Yield to maturity(YTM) is the rate of return that a bondholder will get if he holds bonds till…

Q: Calculate price of a 1-year bond that makes semi-annual coupon payments. The annual coupon rate is…

A: Bond price is the sum of present value of all coupon payments and present value of face value at…

Q: Calculate the Macaulay duration and the modified duration of a three-year bond with a face value of…

A: Answer - Macaulay Duration - Macaulay duration is a weighted average of the times to receive the…

Q: Compute the intrinsic value of an 18% coupon, a 4-year maturity bond whose principal will be repaid…

A: Intrinsic value is calculated by present value of cash flows. Present value of cash flows = Cash…

Q: A 10-year bond carries a 8% coupon rate and pays interest semiannually. The market price of the bond…

A: The bonds are the securities issued by the companies to raise funds. The issuer may be a…

Q: A bond certificate with a value of P 1,081,038.07 has a par value of P 1,000,000.00 and a redemption…

A: Using financial Calculator, PV (Price) = P 1,081,038.07 FV (Face Value) = P 1,030,000.00 N = 10…

Q: You find a zero bond with a par value of $10,000 and 23 years to maturity. The yield to maturity on…

A: The zero-coupon bonds are the bonds under which the company needs to repay the borrowings at the…

Q: Calculate the current market price of the bond

A: FV = 1000 coupon = 13% semiannual = 13/2% each period = 1000*13/2 = 65 each period time n = 10 =…

Q: What is the bond's yield to maturity, with annual compounding?

A: Information Provided: Coupon rate = 3% (semi-annual payments) Period = 18 months or 1.5 years Price…

Q: XYZ Ltd. has earned 8% Return on Total Assests of GHS 50,00,000 and has a Net Profit Ratio of 5%.…

A: Ratio is the tool which is used to evaluate the firm’s performance by establishing relation between…

Q: The 1-year spot rate is 6%, the 2-year spot rate is 7%. The Treasury plans to issue 2-year maturity…

A: Bond is a debt security that is issued by organizations to raise debt funds from public and…

Q: Estimate the cash price of a bond with a face value of 100 that will mature in 30 months and pays a…

A: Bond valuation entails determining the present value of a bond's future cash flows, which include…

Q: There is a 5 year zero coupon bond on the market with the nominal value of 10,000 PLN. The yield to…

A: Yield to maturity for zero coupon bond is 6% Time period for Zero coupon bond is 5 years Nominal…

Q: A two-year amortizing bond has a coupon rate of 4% and pays its coupons semiannually. Coupon…

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: A RM1000 par value bond, bearing a coupon rate of 12 percent will mature after 6 years. What is the…

A: The value of the bond is the price of the bond that is required to be calculated. It is a problem of…

Q: ) Consider buying a 1000 pbr bond at the market price of 800 pbr. The bond pays dividends…

A: Coupon Rate is the rate paid annually or semiannually

Q: A semiannual coupon bond is selling for Sl, 083. It has a face value of $1,000 a coupon rate of 7.7…

A: Step 1: Calculate the Semiannual Coupon PaymentFind the annual coupon payment by multiplying the…

Q: has a coupon rate of 8%, face value of $100, and 3 years to maturity. If its yield to maturity is…

A: Given information :

Q: You are considering a bond with a coupon rate of 10% per annum. Coupons are paid semiannually. The…

A: Computation:

Q: A bond has just been issued. The bond will mature in 3 years. The bond’s annual coupon rate is 12%…

A: Bonds refer to the financial instruments which are raised by the institutions for raising funds from…

Q: The market price of TRUST bond is currently $890. Its par value is equal to $1,000 and it is…

A: Bond: These are fixed-income securities that reflect loans from investors to borrowers . A bond can…

Q: A 23-year bond with a coupon rate of 4.4% has a yield of 7.6%. The bond pays coupons semi-annually.…

A: All the characteristics of a bond have been provided. It's price has to be determined. The price of…

Q: what is the bond's approximate modified duration

Q: A bond has an annual coupon rate of 4.1%, and has 4 years until maturity. If the bonding trading at…

A: Let face value of Bond be $1000 Annual coupon = Face value of bond * Coupon rate = $1000 * 4.1% =…

Q: A salesperson for a medical device company has two appointments on a given da At the first…

A: The 4 possible commissions totals = $2500, $1500, $1000, $0 Calculation of associated probabilities:…

Q: A bond has 9 years until maturity with a coupon rate of 7% and an annual coupon payment of $50 and a…

A: Bonds are the financial instruments issued by firms to holders for a specific time period. This is a…

Q: A bond, paying semi-annual coupons of 1% per annum, matures in 18 months time, and has a dirty price…

A: Yield to maturity(YTM) is the rate of return that a bondholder will get if he holds bond till…

Q: Calculate the duration of a coupon bond with the following features. What general conclusion can we…

A: Bond duration is referred to as the method of the measurement that how much there will be changes in…

Q: Consider a bond, paying 8% semiannual coupons, with face value of US$1,000, maturing in 15 years and…

A: Par Value $ 1,000Coupon rate8.00%Years to maturity15Selling price of bonds$ 724.7

Q: Using the bond's yield rate, calculate the Macaulay duration of the bond in years.

A: The Macaulay duration of a bond represents the weighted average time until each cash flow is…

Q: A 3-year bond with 12% coupon rate and Rs.1000 face value has the yield to maturity of 8%. Assuming…

A: Bond is a debt instrument issued by companies and government. It is a fixed income instrument which…

Q: A bond has a coupon rate of 4.2% when yields are 3.16%. Coupon are paid semi-annuallly. If the…

A: Let's assume par value of the bond is $1000.Semiannual coupon amount (C) = $21 (i.e. $1000 * 0.042 /…

Q: no-arbitrage forward price F0, 15 months

A: Yield %=(Price at year end+Interest for the year-Opening Price)/Opening Price Let the price at the…

Question

A zero - coupon bond has a face value of R10000.it
matures in 13years. The yield to maturity is 4.7 % .
Assume semi-annual compounding .Calculate the value
of the bond.

AI-Generated Solution

AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.

Unlock instant AI solutions

Tap the button
to generate a solution

Click the button to generate
a solution

SEE SOLUTION

Similar questions

A two-year amortizing bond has a coupon rate of 4% and pays its coupons semi- annually. Coupon payments are based upon the outstanding face value at the start of the coupon period. It has a face value of £200 and £50 of the face value is amortized every half year. The yield to maturity is 1% per year. What is the price, duration and convexity of the bond?
Find the price of a semi-annual coupon bond where annual coupon rate is 8%. The face value is Rs. 1000 and there are 5 years until maturity. The annual percentage rate on bonds of comparable risk with semi annual compounding is 16%.
A 5.5 per cent coupon bond with a face value of $1,000 matures in 7 years pays semiannually, and has a yield to maturity of 6.23 per cent. What is the current price?
A two-year amortizing bond has a coupon rate of 4% and pays its coupons semi- annually. Coupon payments are based upon the outstanding face value at the start of the coupon period. It has a face value of £200 and £50 of the face value is amortized every half year. The yield to maturity is 1% per year. What is the price of the bond?
Compute the Macaulay duration under the following conditions: a. A bond with a four-year term to maturity, a 10% coupon (annual payments), and a market yield of 8%. Do not round intermediate calculations. Round your answer to two decimal places. Assume $1,000 par value. _________ years b. A bond with a four-year term to maturity, a 10% coupon (annual payments), and a market yield of 12%. Do not round intermediate calculations. Round your answer to two decimal places. Assume $1,000 par value. _________ years c. Compare your answers to Parts a and b, and discuss the implications of this for classical immunization. As a market yield increases, the Macaulay duration -(Select:declines/increases) . If the duration of the portfolio from Part a is equal to the desired investment horizon the portfolio from Part b is -(Select: no longer/still) perfectly immunized. Only typed answer
The real risk-free rate is 2%. Inflation is expected to be 3% this year, 4%next year, and then 3.5% thereafter. The maturity risk premium is estimatedto be 0.0005 3 (t 2 1), where t 5 number of years to maturity. What is thenominal interest rate on a 7-year Treasury security?
The taltola bond has a duration of 2.87 years and Beltola bond has Tk.1,000 par value, 3years to maturity , and an 8 percent yield paying semiannual interests at 10 percent. The current yield curve represents an inverted trend indicating decline in future interest rates. Under these circumstances, you have to decide which bond you have to invest in. Calculate the duration of Beltota bond and tell us which bond you will invest in and why.
What is the duration of a 2-year bond that pays a coupon of 4% per annum? It has a face value of $100. The yield on the bond is 8% per annum with continuous compounding.
Give typing answer with explanation and conclusion You are looking at a 23-year zero-coupon bond that has a yield to maturity of 4.4% . What is the value of the bond? Assume semi-annual compounding.
2. A bond pays semi-annual coupons with c(2) = .085. Assume the face value equals $10,000 and matures in 4 years. The YTM of the bond is given as i(2) = .07. Construct the amortization table for this bond. 3. Calculate the price of the bond in problem #2 above at time t=1/2.
A bond, paying semi-annual coupons of 4% per annum, matures in 18 months time, and has a dirty price of $92.91. What is the bond's yield to maturity, with annual compounding?
A bond with a face value of P1,000 that will matures in 10 years. It pays a P50 coupon every year, and it can be called in 5 years at a call price of P1,200. The annual current yield of this bond is 4%. Determine the bond’s nominal yield to call. (In percentage, put percentage sign)

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS