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FINANCIAL ACCOUNTING

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A 6-year 8% annual coupon bond yields 8%. The bond is callable in one year at 101.
The yield to call is
% (two decimals).

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The outstanding bonds of CEPS Group provide a nominal yield to maturity of 7.19 percent. The real rate of return is 3.71 percent. What is the rate of inflation?
MCQ: The yield on bond is 7% and the market required return is 14% then market risk premium would be A. 0.02 B. 0.21 C. 0.005 D. 0.07
Q1. Price and Yield. Yield (%) Price at required yield ( coupon rate/ maturity) 6% / 5 6% / 20 3%/5 3% / 20 0% / 5 0% / 20 year year year year year year 3.00 4.00 5.50 5.90 5.99 6.00 6.01 6.10 7.50 8.00 Assume face value is $100. a. Plot the table. b. What is the shape of the price-yield relationship? c. Describe the general relationship you observe between changes in bond prices and changes in yield to maturity.
Urgently need
A bond with a face value of $1,000 was purchased last year for $985 and sold today for $1,120. The coupon rate on the bond is 7% and inflation this past year was 3%. e. What is the income yield? f. What is the capital gain yield? g. What was the total return on investment? h. What was the real rate of return?
The price of a bond is 900$, if the coupon rate decreased, the price of this bond will? a. Remain the same. b. Increase. c. Decrease.
Calculate the annual interest in dollars in current yield as a percent of the bond. Round your percentage to one decimal Place? ( for annual interest I got $8.25 it’s wrong ) ( current yield is correct 8.0)
Calculate the annual interest (in $) and current yield (as a %) of the bond. (Round your percentage to one decimal place.) Company Coupon Rate Annual Interest Company 5 8.25% +A Market Price 104.00 Current Yield %
4. Calculate the Macauley Duration of your Bond at the given Yield-To-Maturity. Bond Pricing Date Annual Coupon Rate Number Coupons per year Maturity Date Yield Par Value Currency Treasury 22-Oct-20 1.625% 2 22-Oct-28 2.00% 1,000,000 GBP
the current yield of a bond goes down from 6.2% to 4.9%, what percent does the market price increase?
Which of the following bonds will have the larger price change (dollar value) for a 75- basis point change in yield? A. A $120 dollar bond with duration 2.25 B. A $70 dollar bond with duration 3.25 C. A $160 dollar bond with duration 1.75 D. A $200 dollar bond with duration 1.25 E. A $300 dollar bond with duration 0.75
Can you explain the working for the Bond Yield (Annual). If I were to work it outside of Excel, how would I calculate it to get to "8.30%"

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