Consider a bond with a 10% coupon and yield to maturity = 8%. If the bond’s yield to maturity remains constant, then in one year, will the bond price be higher, lower, or unchanged? Why?

Suppose that the yield curve shows that the one-year bond yield is 8 percent, the two-year yield is 7 percent, and the three-year yield is 7 percent. Assume that the risk premium on the one-year bond is zero, the risk premium on the two-year bond is 1 percent, and the risk premium on the three-year bond is 2 percent. a. What are the expected one-year interest rates next year and the following year? The expected one-year interest rate next year = The expected one-year interest rate the following year b. If the risk premiums were all zero, as in the expectations hypothesis, what would the slope of the yield curve be? The slope of the yield curve would be (Click to select) % %

Suppose today you buy a coupon bond that you plan to sell one year later. Which of the rate of return formula incorporates future changes into the bond's price?

Suppose that a bond makes annual coupon payments at a 7% coupon rate, has 10 years until maturity, and is currently trading at 95. If the yield to maturity on the bond remains unchanged over the next year, what will be the total holding period return on the bond over the period? It should come out to 7.74% but I seem to be doing something wrong, thanks!

If the current yield of a bond goes down from 6.1% to 4.5%, by what percent does the market price increase?

What would happen to the values of the 12%, 15%, and 7% coupon bonds over time if the required return was 9%?

Assume that the bond from problem #1 reaches maturity in 5 years instead of 15 years, with the same coupon rate and par value. What would the relevant market prices be at 10%, 5%, and 14% required market rates of return?

Suppose you purchase a ten-year bond with 12% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 10.64% when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per $100 face value? b. What is the internal rate of return of your investment? Note: Assume annual compounding. a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flow at time 1-3 is $ (Round to the nearest cent. Enter a cash outflow as a negative number.) The cash outflow at time 0 is $ number.) (Round to the nearest cent. Enter a cash outflow as a negative The total cash flow at time 4 (after the fourth coupon) is $. (Round to the nearest cent. Enter a cash outflow as a negative number.) b. What is the internal rate of return of your investment? The internal rate of return of your investment is %. (Round to two decimal…

Suppose you have a 10-year bond (the bond will mature in 10 years), with a coupon rate of 2.45%. Coupons are paid on a semi-annual basis. The face value of the bond is $1000. Suppose the bond's yield to maturity suddenly increases from 2.13% to 2.63%. What is the impact on the price of the bond in percentage terms? Justify all of your response.

Consider the zero coupon Treasury bond yield curve. Suppose a 1 year bond has a yield of 2.13%. The yield curve slopes downwards between maturities of 1 year and 3 years, and then slopes upwards. Which of the following must be true?   Group of answer choices   A) The yield of a zero coupon bond with maturity 5 years is higher than 2.13%.   B) A 1 year positive coupon bond must have a lower price than the zero coupon bond with the same maturity.   C) Bond purchasers believe the Fed will decrease rates in the short run, and then increase them in the long run.   D) The economy will be in a recession within 2 years.   E) C and D.