An investor purchases a 30-year, zero-coupon bond with a face value of $5,000 and a yield to maturity of 8%. He sells this bond ten years later. What is the rate of return on his investment, assuming yield to maturity does not change? OA. 4% OB. 4.8% OC. 6.4% OD. 8%
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- Bond Value as Maturity Approaches An investor has two bonds in his portfolio. Each bond matures in 4 years, has a face value of 1,000, and has a yield to maturity equal to 9.6%. One bond, Bond C, pays an annual coupon of 10%; the other bond, Bond Z, is a zero coupon bond. Assuming that the yield to maturity of each bond remains at 9.6% over the next 4 years, what will be the price of each of the bonds at the following time periods? Fill in the following table:Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may be called in 4 years at a call price of 1,060. The bond sells for 1,100. (Assume that the bond has just been issued.) a. What is the bonds yield to maturity? b. What is the bonds current yield? c. What is the bonds capital gain or loss yield? d. What is the bonds yield to call?An investor purchases a 30 -year, zero-coupon bond with a face value of $5,000 and a yield to maturity of 6.5%. He sells this bond ten years later. What is the rate of return on his investment, assuming yield to maturity does not change? A. 6.5% B. 5.2% C. 3.9% D. 3.25%
- An investor purchases a 30-year, zero-coupon bond with a face value of $5,000 and a yield to maturity of 6.3%. He sells this bond ten years later. What is the rate of return on his investment, assuming yield to maturity does not change? OA. 3.78% OB. 6.3% OC. 5.04% OD. 3.15%K An investor purchases a 30-year, zero-coupon bond with a face value of $1,000 and a yield to maturity of 8.3%. He sells this bond ten years later. What is the rate of return on his investment, assuming yield to maturity does not change? OA. 8.3% OB. 6.64% OC. 4.98% OD. 4.15% BICCERA ten-year, zero-coupon bond with a yield to maturity of 6.9% has a face value of $5,000. An investor purchases the bond when it is initially traded, and then sells it four years later. What is the annual rate of return of this investment, assuming the yield to maturity does not change? OA. 6.9% OB. 4.1% OC. 5.5% OD. 3.5%
- A ten - year, zero - coupon bond with a yield to maturity of 6.4% has a face value of $1,000. An investor purchases the bond when it is initially traded, and then sells it four years later. What is the annual rate of return of this investment, assuming the yield to maturity does not change? O A. 3.2% O B. 5.1% O c. 6.4% O D. 3.8%note:- give me answer( d) explan answer Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 6%. You hold the bond for five years before selling it. a. If the bond's yield to maturity is 6% when you sell it, what is the internal rate of return of your investment? b. If the bond's yield to maturity is 7% when you sell it, what is the internal rate of return of your investment? c. If the bond's yield to maturity is 5% when you sell it, what is the internal rate of return of your investment? d. Even if a bond has no chance of default, is your investment risk free if you plan to sell it before it matures? Explain. Note: Assume annual compounding.You purchase a zero coupon bond with 12 years to maturity and a yield to maturity of 4.93 percent. The bond has a par value of $1,000. What is the implicit interest for the first year? Assume semiannual compounding. a.$27.12 b.$26.89 c.$27.82 d.$24.34 e.$26.71
- Dog Suppose you purchase a 10-year bond with 6.6% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 5.4% when you purchased and sold the bond, a. what cash flows will you pay and receive from your investment in the bond per $100 face value? b. what is the annual rate of return of your investment?Suppose you purchase a 10-year bond with 6.19% annual coupons. You hold the bond for 4 years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 5.34% when you purchased and sold the bond, a. what cash flows will you pay and receive from your investment in the bond per $100 face value? b. what is the annual rate of return of your investment? a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flows from the investment are shown in the following timeline: (Round to the best choice below.) A. Years 2 3 Cash Flows $106.46 $6.19 $6.19 $6.19 $110.46 B. Years 0 2 3 4 Cash Flows - $106.46 $6.19 $6.19 $6.19 $110.46 C. Years 0 1 2 3 4 Cash Flows $104.27 $6.19 $6.19 $6.19 $110.46 D. Years 0 2 3 4 + $6.19 $6.19 $6.19 $104.27 Cash Flows - $110.46 b. What is the annual rate of return of your investment? The annual rate of return of your investment is %. (Round to two decimal places.)Suppose you purchase a zero coupon bond with a face value of 10,000 maturing in 10 years, for $3,700. Zero coupon bonds pay the investor the face value on the maturity date. What is the implied dollar interest you would earn in the first year of the bond’s life? Select one: $370.00 $380.00 $386.78 $1,000.00 $256.72
