Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- A Treasury bond has a face value of $100, a maturity of 20 years, a coupon of 4%, and pays the coupon every six months, at the end of each six month period. The price of the bond is $105. What is the yield of this bond? a. 3.65% b. 1.8% C. 1.7% d. 3.8%arrow_forwardThe Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity in 8 years. The bond certificate indicates that the stated coupon rate for this bond is 9.8% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is 7.2%, then the price that this bond trades for will be closest to: A. $1,387 B. $1,618 O C. $1,156 D. $925arrow_forwardThe face Value of the 8.5% bond is $1,000 with a maturity period of 5 years. The bond is selling currently at $943:15: The yield-to maturity on the similar bond-is 10%. Calculate Bond Duration and Volatility of the Bondarrow_forward
- A bond currently has a price of $1,050. The yield on the bond is 6%. If the yield increases 27 basis points, the price of the bond will go down to $1,028. The duration of this bond is __________ years. (Select the closest answer.) Multiple Choice 7.32 8.27 8.42 7.78arrow_forwardA 9% semiannual coupon bond matures in 5 years. The bond has a face value of $1,000 and a current yield of 8.8514%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places. Bond’s price: $ YTM: %arrow_forwardA bond with a 9-year duration is worth $1,086, and its yield to maturity is 8.6%. If the yield to maturity falls to 8.38%, you would predict that the new value of the bond will be approximately $1,083.61 $1,086.00 $1,105.77 $1,088.39arrow_forward
- A fixed-income analyst, Sean, observes a 7-year, 8% semiannual-pay bond. the face amount is ¥1,000. He believes that the yield-to-maturity (YTM) on a semiannual bond basis should be 12.29%. Based on this yield estimate, the price of this bond would be A. ¥942.73. B. ¥900.89. C. ¥828.39. D. ¥802.40.arrow_forwardThere is a bond that has a quoted price of 105.039 and a par value of $2,000. The coupon rate is 6.87 percent and the bond matures in 25 years. If the bond makes semiannual coupon payments, what is the YTM of the bond? 4.85 % 3.14% 3.23% 5.81 % 6.46%arrow_forwardPlease show working Please answer ALL OF QUESTIONS 1 AND 2 1. A 7% semiannual coupon bond matures in 6 years. The bond has a face value of $1,000 and a current yield of 7.5219%.a. What is the bond's price? Do not round intermediate calculations. Round your answer to the nearest cent.b. What is the bond's YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answers to two decimal places. 2. Nesmith Corporation's outstanding bonds have a $1,000 par value, a 7% semiannual coupon, 18 years to maturity, and a 9% YTM. What is the bond's price? Round your answer to the nearest cent.arrow_forward
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