Herry is planning to purchase a Treasury bond with a coupon rate of 2.38% and face value of $100. The maturity date of the bond is 15 March 2033.(c) If Henry purchased this bond on 4 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.3% p.a. compounded half-yearly. Henry needs to pay 27.8% oncoupon payment and capital gain as tax payment. Assume that all tax payments are paid immediately.a. 66.0182O b. 80.6553O c. 91.4031d. 79.6067

The correct answer is (c) 91.4031.Here's how to calculate the purchase price of the bond:Present…

Answered: Herry is planning to purchase a…

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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Henry is planning to purchase a Treasury bond with a coupon rate of 2.26% and face value of $100. The maturity date of the bond is 15 March 2033. (b) If Henry purchased this bond on 3 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.11% p.a. compounded half-yearly. Henry needs to pay 28.2% on coupon payment as tax payment and tax are paid immediately. a. 84.9188 O b. 84.1098 c. 84.9203 ○ d. 85.4177
Angelo purchased a 7% annual coupon bond one year ago for $987. At the time of purchase, the bond had six years to maturity. Over the past year inflation has been 3.2%. The market required return on this bond today is 8%. If Angelo sells the bond today at the market price, what real rate of return will he realize on this investment? -1.16% 1.13% 4.36% 4.33% 1.17%
Iolanda purchased a Treasury bond with a coupon rate of 4.59% and face value of $100. The maturity date of the bond is 15 April 2029. (a) Luciana plans to purchase Iolanda's Treasury bond on 12 April 2018. What price will Luciana pay (rounded to four decimal places)? Assume a yield of 2.54% p.a. compounded half-yearly. a. 119.5663 b. 119.5414 c. 119.5404 d. 118.7648
Having an opportunity to acquire a certain bond that has a face value of P1M and matures in 5 years, Lenard decided to buy the bond. This means that when the bond reached its maturity date, he will be receiving P1.2M. The bond is contracted at a foxed nominal rate of 16% and interest payments to be paid quarterly. On the other hand, Lenard would like to earn an 18% nominal interest compounded quarterly. Given the scenario, determine how much Lenard should be willing to pay to gain the bond.
Today is 1 July, 2022, Georg plans to purchase a corporate bond with a coupon rate of j2 = 1.69% p.a. and a face value of $100. This corporate bond matures at par. Its maturity date is 1 January, 2025. The yield rate is assumed to be j2 = 10.9% p.a. Assume that this corporate bond has a 6% chance of default in any six-month period during its term. Assume, also, that, if default occurs, Georg will receive no further payments at all. Calculate Georg's purchase price. Round your answer to three decimal places. Answer a. $59.319 b. $81.541 c. $80.092 d. $53.631
Pierre Dupont just received a cash gift from his grandfather. He plans to invest in a 5 year bond issued by Venice Corp. that pays an annual coupon rate of 5.5%. If the current market rate is 7.2%, what is the maximum amount Pierre should be willing to pay for this bond?
Today is March 21, 2023. Jack plans to buy a Treasury bond that matures in May 2052. The bond pays coupons semi-annually on May 15 and November 15 of each year. The Treasury bond has an annual coupon rate of 5 percent. If Jack buys the bond today, there are 56 days to the next coupon payment (out of the 184 days in the current semi-annual period). How much must Jack pay for the bond if he knows the clean price of this bond is $1,150?
I need the answer as soon as possible
Susan can buy a zero-coupon bond that will pay 1,000 at the end of 12 years and is currently selling for 624.60. Instead, she purchases a bond with 6% semi-annual coupons that will pay 1,000 at the end of 10 years. If she pays X for this bond she will earn the same annual effective interest rate as the zero-coupon bond. Calculate X.
Kevin owns a bond that has a face value of $1,000, a remaining maturity of 8 years and a current market price of $1,056.50. If Kevin believes that his bond has a yield to maturity of 6.28%, then what must be the annual Coupon PMT of Kevin’s bond?
Herry is planning to purchase a Treasury bond with a coupon rate of 2.67% and face value of $100. The maturity date of the bond is 15 March 2033. (d) If Henry purchased this bond on 7 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.31% p.a. compounded half-yearly. Henry needs to pay 27.8% on coupon payment and capital gain as tax payment. Assume that all tax payments are delayed by half year. Question 4Answer a. 83.6029 b. 68.6929 c. 82.4233 d. 94.5242
The face value for FDCD Ltd bonds is $250,000 and has a 6 percent annual coupon. The 6 percent annual coupon bonds matures in 2035, and it is now 2020. Interest on these bonds is paid annually on December 31 of each year, and new annual coupon bonds with similar risk and maturity are currently yielding 10 percent. How much should Karen sell her bonds today?

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