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% D. 3.15%
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- Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for 1,135.90, producing a nominal yield to maturity of 8%. However, the bond can be called after 5 years for a price of 1,050. (1) What is the bonds nominal yield to call (YTC)? (2) If you bought this bond, do you think you would be more likely to earn the YTM or the YTC? Why?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 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% D. 8%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%A 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%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% BICCERSuppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 6.4%. You hold the bond for five years before selling it. a. If the bond's yield to maturity is 6.4% when you sell it, what is the annualized rate of return of your investment? b. If the bond's yield to maturity is 7.4% when you sell it, what is the annualized rate of return of your investment? c. If the bond's yield to maturity is 5.4% when you sell it, what is the annualized 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:- 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 30-year, zero-coupon bond for a price of $15. The bond will pay back $100 after 30 years and make no interim payments. The annual compounded return (geometric average return) on this investment is: OA. 6.2% OB. 7.83 % C. 5.55 % D. 6.53 %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.