Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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If long-term bonds pay 8% coupon, and mature in 12 years, what is their MV(market value), assuming 9% YTM?
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- The yield to maturity of a $1000 bond with a 6.8 % coupon rate, semiannual coupons, and two years to maturity is 8.9% APR, compounded semiannually. What is its price? Farrow_forwardWhat would happen to the values of the 12%, 15%, and 7% coupon bonds over time if the required return was 9%?arrow_forwardA firm plans to issue 20 years bonds with a 7% annual coupon rate. The face value will be $1000 and the bonds will sell at par. If their investment banker charges them flotation costs of 5%, what will the YTM be on the bonds?arrow_forward
- What is the current yield of a bond with a 5.2% coupon paying interest annually, 7 years until maturity, a face value of $1,000, and a YTM of 6.5%?arrow_forwardSuppose the real risk-free rate of interest is r=4% and it is expected to remain constant over time. Inflation is expected to be 1.60% per year for the next two years and 3.90% per year for the next three years. The maturity risk premium is 0.1 x (t-1) %, where t is number of years to maturity, a liquidity premium is 0.45%, and the default risk premium for a corporate bond is 1.40%, The average inflation during the first 4 years is What is the yield on a 4-year Treasury bond? O 6.75% O 8.90% O 4.30% O 7.05% What is the yield on a 4-year BBB-rated bond? O 7.50% O 7.05 % O 8.45% 8.90% If the yield on a 5-year Treasury bond is 7.38% and the yield on a 6-year Treasury bond is 7.83%, the expected inflation in 6 years is (Hint: Do not round intermediate calculations.)arrow_forwardSuppose that 6 - month, 12-month, 18 - month, 24 month, and 30 - month zero rates are 4%, 4.2%, 4.4%, 4.6%, and 4.6% per annum with continuous compounding respectively. Estimate the cash price of a bond with a face value of 100 that will mature in 30 months and pays a coupon of 6% per annum semiannually.arrow_forward
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