Multiple ChoiceOOOO9.19%5.69%10.50%6.00% Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 5.50%. Assume annual coupon payments.Coupon + PrincipalpaymentrepaymentInflation inTime year just ended01233.5%2.5%4.5%Par value$1,000.00$1,035.00$1,060.88$1,108.62 $60.97 $1,108.62$56.93$58.35What is the nominal rate of return on the TIPS bond in the first year?00=Totalpayment$ 56.9358.35$1,169.59

TIPS security, also known as Treasury Inflation-Protected Securities, are bonds issued by the U.S.…

Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 5.50%. Assume annual coupon payments. + Principal = Total repayment payment Inflation in Time year just ended 0 1 2 3 3.5% 2.5% 4.5% Par value $1,000.00 $1,035.00 $1,060.88 $1,108.62 Coupon payment $56.93 $58.35 $60.97 0 0 $1,108.62 What is the nominal rate of return on the TIPS bond in the first year? $ 56.93 $ 58.35 $1,169.59

Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 5.50%. Assume annual coupon payments. + Principal = Total repayment payment Inflation in Time year just ended 0 1 2 3 3.5% 2.5% 4.5% Par value $1,000.00 $1,035.00 $1,060.88 $1,108.62 Coupon payment $56.93 $58.35 $60.97 0 0 $1,108.62 What is the nominal rate of return on the TIPS bond in the first year? $ 56.93 $ 58.35 $1,169.59

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Consider a bond portfolio with the following two bonds under an annual effective interest rate of 3%: 3-year zero-coupon bond with face value of $1,000 • 3-year coupon bond with face value of $1,000 and annual coupons paid at the end of each year, currently priced at par Calculate the Macaulay duration of the bond portfolio. 2.83 3.00 O 2.91 O2.02 O 3.12
A 5-year bond with 10% coupon rate and P1000 face value is selling for P1,054.30. Calculate the yield to maturity on the bond assuming annual interest payments. Use 5 decimal places in your computation Format: 1.11%
If you initially pay $1000 for a bond with an annual interest then the market interest rate rises to 6% the market price of the bond is now A $1,000 B $943.40 C $1,006 D $1,000.05
Construct a bond schedule showing the accumulation of discount on a 6,000 4% bond with quarterly coupon, redeemable at 102 at the end of 2 years and 3 months and priced to yield 5 ½% m=4. (Accumulation of Discount)
4) A 10 year bond with $50, 000 face value has semiannual coupon rate 4% and semiannual yield rate 2%. Fill out the following amortization table. Principle Outstanding t Payment Interest герaid Balance 1 2 3 12
1. A P1,000 face-value bond with coupon rate of 8% paying interest semi-annually has a current market price of P1,050. Compute for (a) semi-annual interest earned gain b) rate of capital and (c) the rate of return
Using the following information, determine the maturity risk premium on 10 year bonds: Rate % inflation 0.74 T-bill 5.00 10y T-Bond 6.00 10y AAA Corporate 6.37 10y AA Corporate 7.62
Review the Bond Table below; all bonds have semi-annual payments. Security. Coupon Rate Face Value 0.00% $1,000 4.50% $1,000 5.00% $1,000 $1,000 1-yr Treasury 5-yr Treasury 10-yr Treasury 5-yr Corporate (rated A) Multiple Choice 10-year Corporate 8.40% (rated BBB) What is the BBB Default Risk Premium (rdp-BBB)? O O 4.80% 1.75% 2.20% 2.75% 3.40% None of the above Price $ 965.90 $991.18 $976.94 $912.46 $1,000 $1,044.66
Bond Coupon Rate (%) Number of Years to Maturity Price TII $884.20 $948.90 $967.70 $456.39 W X Y 7 8 9 0 5 7 4 10 Calculate the yield to maturity for the four bonds. SOLCE USING BA2 CALC.
Q.A $1,000 face value bond with 22 years to maturity and a 7.2% coupon (coupons paid semiannually) recently sold for $1,063.66. The return on this bond is?
A bond has the following terms: Principal amount $1,000 Semi-annual interest $45 Maturity 15 years a. What is the bond's price if comparable debt yields 11%? b. What would be the price if comparable debt yields 11% and the bond matures after ten years? c. What would be the bond's price in a. and b. if interest rates declined to 8 % ?

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