Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Boeing Corporation has just issued a callable (at par) three-year, 4.9% coupon bond with semi-annual coupon payments. The bond can be called at par in two years or anytime thereafter on a coupon payment date. It has a price of $99.04. a. What is the bond's yield to maturity? b. What is its yield to call? c. What is its yield to worst? a. What is the bond's yield to maturity? The bond's yield to maturity is %. (Round to two decimal places.)
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- Suppose that a bond pays semiannual coupons in the sequence 25, 30, 25, 35, 25, 40, ..., 25, 85. If the redemption value is 2500 dollars and the yield rate is 8.6 percent convertible semiannually, what is the price of the bond? Answer= dollars.arrow_forward← Suppose a seven-year, $1,000 bond with an 8.4% coupon rate and semiannual coupons is trading with a yield to maturity of 6.65%. a. Is this bond currently trading at a discount, at par, or at a premium? Explain. b. If the yield to maturity of the bond rises to 7.05% (APR with semiannual compounding), what price will the bond trade for? a. Is this bond currently trading at a discount, at par, or at a premium? Explain. (Select the best choice below.) O A. Because the yield to maturity is less than the coupon rate, the bond is trading at a premium. B. Because the yield to maturity is greater than the coupon rate, the bond is trading at par. OC. Because the yield to maturity is greater than the coupon rate, the bond is trading at a premium. D. Because the yield to maturity is less than the coupon rate, the bond is trading at a discount.arrow_forwardA bond that pays interest semiannually has a coupon rate of 5.08 percent and a current yield of 5.37 percent. The par value is $1,000. What is the bond's price?arrow_forward
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