Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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How much does the $1,000 to be received upon a bond's maturity in 8 years add to the
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- Yield Computation. What is the yield to maturity for a bond paying $45 semiannually that has twelve years until maturity and sells for $975? (5 points)arrow_forwardTen-year bonds have an interest rate of 6.5 percent, while 15-year bonds have an interest rate of 6.0 percent. If the expectations theory is correct, what does the market believe will be the interest rate on 5-year bonds, 10years from now? 5.5% 5% 12.5% 6.25%arrow_forwardSuppose a U.S. government bond pays $2,155.40 in 5 years at 6% interest. Calculate the present value of the bond.arrow_forward
- A 10-year government bond has face value of OR 200 and a coupon rate of 6% paid semiannually. Assume that the interest rate is equal to 8% per year. What is the bond’s price? What is the reason for the difference in price on an annual and semiannually basis? Discuss the role of financial managers.arrow_forward1. If I purchase a semiannual-paying 8% coupon bond 27 days after the last coupon payment, what is the accrued interest?arrow_forwardA 9-year bond has a yield of 13.5% and a duration of 8.63 years. If the MARKET yield changes by 60 basis points, what is the percentage change in the bond’s price? Is this an increase or decrease? A 9-year bond has a yield of 13.5% and a duration of 8.63 years. If the BOND'S yield changes by 60 basis points, what is the percentage change in the bond’s price? Is this an increase or decrease? ( Explain well both question with proper step by step Answer) .arrow_forward
- A bond pays P342 interest per year and has face value of P9,813 at the end of 6 years, when it has to be redeemed. If the interest of the bond is 0.19. What is the current value of the bond?arrow_forwardSuppose the U.S. Treasury offers to sell you a bond for $2,000. No payments will be made until the bond matures 15 years from now, at which time it will be redeemed for $4,000. What interest rate would you earn if you bought this bond at the offer price?arrow_forwardWhat is the present value of a $1000 future amount received in 17 years if the appropriate discount rate is 11.7% APR? (FYI: This problem computes the value of a 17 year, $1000 zero coupon bond, although it is phrased in time value of money language, rather than bond language.) Answer to 2 decimal points.arrow_forward
- 3 A $1000 face value, 8% bond (interest payable semiannually) has 20 years remaining until maturity (at which time it will be redeemed at face value). The rate of return required by the market on this type of bond is 8% compounded semiannually. What is the market value of this bond today?arrow_forwardSuppose a treasury bond will pay $2,500 five years from now. If the going interest rate on 5-year treasury bonds is 5%, how much is the bond worth today? Round-off answer to 2 decimal values. *arrow_forwardWhat is the market price of a $1,000, 9 percent bond if comparable market interest rates drop to 7 percent and the bond matures in 12 years?arrow_forward
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