If the nominal rate of return on a corporate bond is 15%, the pure rate is 4%, and the risk premium is 7%, what is the inflation premium on this bond?   a. 3.34%   b. 4.00%   c. 0.00%   d. 11.28%

Q: If 8-year T-bonds have a yield of 6.36%, 8-year corporate bonds yield 8.36%, the maturity risk…

A: An additional amount an investor expects when an investor invests in the risky securities is term as…

Q: Bearing in mind that the inflation rate is 4%, what is the real rate of return for a Goldman Sachs…

A: Inflation Rate = 4%  Annual interest and yield = 8.50%

Q: A Treasury bond that matures in 10 years has a yield of 8%. A 10-year corporate bond has a yield of…

A: Solution : Given Treasury bond that matures in 10 years has a yield of 8%  10-year…

Q: Consider the coupon bond issued by XYZinc Term:3years Payment:175 Facevalue:500 Currently the…

A: Bond's risk-free rate and its price will always be inversely related with each other.

Q: What is the yield-to-maturity of an Acme bond selling for $1,107.50 with 5 years to maturity, a 12…

A: Yield to maturity is the percentage rate which shows the percentage return earned by the investor if…

Q: If the current yield of a bond goes down from 6.9% to 4.8%, by what percent does the market price…

A: In terms of finance, current yield can be defined as the return on the bond investment. The formula…

Q: If you invest in a $1,000 bond and pay a price of $832, and the coupon rate on the bond is 4%, what…

A: Given information: Par value of bond is $1,000 Current price of bond is $832 Coupon rate is 4%

Q: When a coupon bond pays coupon at the same rate as its market yield, the coupon bond is priced at…

A: When the coupon rate and yield to maturity is equal then bonds trade at par, when the coupon rate is…

Q: f the nominal rate of return on an Aksoy Corporation bond is 9%, the risk premium is 4%, and the…

A: The pure rate of return or interest is the rate of interest that is adjusted according to the…

Q: J & J Manufacturing just issues a bond with a GHC100,000 face value and a coupon rate of  7%. If the…

A: Calculations:

Q: Q30 If the price of the perpetual bond is OMR 375 with a coupon rate of 5%. What is the required…

A: The formula used is shown: where: Kpb= Required Return on perpetual bond

Q: a treasury bond has a quoted bid price of 97.125 and a quoted ask price of 97.255. what is the…

A: Ask price is the price at which the seller of an asset is ready to sell the asset. Whereas the bid…

Q: A firm has an outstanding bond paying a coupon rate of 12%. The firm's tax rate is 34%. If the…

A: The question is based on the concept of Financial Accounting.

Q: What is the yield on a corporate bond with a $1000 face value purchased at a discount price of $925,…

A: The annual income (interest or dividends) from an investment is divided by the current price of the…

Q: CEPS Group has bonds outstanding with a 6.61 percent nominal yield to maturity. The current rate of…

A: Real rate of return is the rate according to which the prices of the bond are adjusted considering…

Q: What is the yield on a corporate bond with a $1000 face value purchased at a discount price of $950,…

A: GIVEN, FACE VALUE = $1000 PRICE = $950 INTEREST RATE = 8%

Q: what is the yield on a 4-year BBB-rated corporates bond with a liquidity premium of 0.5%?

A: A bond's yield is the rate of return received from the bond's coupon payments. It can be calculated…

Q: A semiannual corporate bond has a face value of $1,000, a price of $785.24, a coupon rate of 9.5%…

A: YTM =C + FV -MPNFV+MP2 where  C = Coupon payment FV = Face value MP = Market value N = Number of…

Q: General Matter’s outstanding bond issue has a coupon rate of 9.2%, and it sells at a yield to…

A: We need to understand the relationship between yield to maturity(YTM) and coupon rate (a) if…

Q: CEPS Group has bonds outstanding with a 9.24 percent nominal yield to maturity. The current rate of…

A: It is the annual realized percentage return on an investment which is adjusted in price due to…

Q: What is the yield on a corporate bond with a $1000 face value purchased at a discount price of $950,…

A: given information   face value = $1000 discount price = 950  interest rate = 6%

Q: the nominal rate of return on an Aksoy Corporation bond is 9%, the risk premium is 4%, and the…

A: Nominal Rate of Interest =9% Risk Premium =4% Inflation rate =2%

Q: A Treasury bond that matures in 10 years has a yield of 5.75%. A 10-year corporate bond has a yield…

A: Risk premium is the rate which an investor bears above the risk-free rate of return on the…

Q: A Rio Tinto corporate bond currently sells for $1,450, which gives it a yield to maturity of 7%. Its…

A: The duration of a bond is a measure of the change in bond prices with the change in the interest…

Q: A fixed rate bond with notional 1 pays annual coupons of c at times T1,T2,...,Tn whereTi+1…

A: ZCBs are zero-coupon bonds that do not pay any interest or coupons to the bondholders, only the…

Q: For a bond that is currently selling for par value (e, $1000), which one of the following…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: i) How much will the bond sell for? AP (6) ii) Is the bond selling at a premium or a discount?

A: Bond: It is a debt instrument issued by the firm to raise capital. The company has to provide a…

Q: A​ BBB-rated corporate bond has a yield to maturity of 6.6%. A U.S. Treasury security has a yield to…

A: Present Value can be calculated using PV function in excel   PV (rate, nper, pmt, [Fv], [type])…

Q: If the coupon rate on a bond is 8 percent and current market interest ratesare 6 percent, should…

A: Given that, coupon rate on a bond is 8 percent and current market interest rates are 6 percent.

Q: What is the default risk premium on Aaa corporate bond, if the interest rate on that bond is 3.25…

A: Solution: The treasury securities are default risk free securities because these are issued by the…

Q: A 10-year T-bond has a yield of 6%. A 10-year corporate bondwith a rating of AA has a yield of 7.5%.…

A: To compensate for the risk taken, a greater return is demanded by the investor over and above the…

Q: If a company's bonds are selling at a discount, then Select one: a. The current interest rates…

A: If a company sell bond at a discount then it means that the going interest rate is more than the…

Q: If 10-year Treasury bonds have a yield of 4.3%, 10-year corporate bonds yield 6.7%, the maturity…

A: The return on the investment of the bonds more than the risk-free rate is referred to as risk…

Q: You have a treasury bond that pays $100 one year from today and $1,100 two years from today. You…

A: The price of your bond is the present value of future cashflows

Q: corporate issue will be brought to the market at a spread of T+ 68bp. Explain what this means and…

A: Corporate bonds are issued with some benchmark interest rate and some addition to some benchmark…

Q: 3. Assume that the real risk-free rate, k*, is 3 percent and that inflation is expected to be 8…

A: Market risk premium can be calculated using the following formula:…

Q: The outstanding bonds of CEPS Group provide a nominal yield to maturity of 7.19 percent. The real…

A: Formula: Inflation rate = ((1+Nominal rate) / (1+real rate)) -1

Q: A semiannual corporate bond has a face value of $1,000, a price of $785.24, a coupon rate of 9.5%…

A: A bond refers to the instrument which obligates the issuer to pay pre-defined interest to the buyer.…

Q: If 10-year T-bonds have a yield of 4.0%, 10-year corporate bonds yield 7.6%, the maturity risk…

A: An additional amount an investor expects when an investor invests in the risky securities is term as…

Q: A Treasury bond that matures in 10 years has a yield of 6.25%. A 10-year corporate bond has a yield…

A: Corporate bond yield = 10.75% Treasury bond yield (Risk free) = 6.25% Liquidity premium = 0.35%

Q: A bond has a face value of ₱100, 000, 4-year maturity period, and 3.2% coupon. What is the total…

A: To calculate the total interest paid we will use the below mentioned formula   Total interest paid =…

Q: What is the yield on a corporate bond with a $1000 Face value purchased at a discount Price of $850,…

A: Bonds are long-term financial debt for the company. Bonds help the company to raise funds and in…

Q: Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 7 percent, has a…

A: Price of a bond can be caluclated as the sum of present value of all the coupon payments made and…

Q: If a P1,000 bond sells for P1,125, which of the following statements are correct? I. The market rate…

A: given, market price = p1125 par= p1000

Q: Suppose an 6% semi-annual coupon, 20-year bond is selling for R1,201.74. What is the Bond Equivalent…

A: Given, The coupon rate is 6% Term is 20 years price of bond is R1201.74

Q: A Treasury bond that matures in 10 years has a yield of 6%. A 10-year corporate bond has a yield of…

A: corporate bond yield = 9% liquidity premium =  0.5% Treasury bond yield  =6%

Q: General Maiter%u2019s outstanding bond issue has a coupon rate of 10.6%, and it sells at a yield to…

A: A bond is a debt instrument that helps the issuer of a bond to raise borrowing capital funds at a…