Manuel bought a $100,000 bond with a 5.5%coupon for $92,450 when it had five years remaining to maturity. What was the prevailing market rate at the time Manuel purchased the bond? Bond interest is paid semi-annually The bond was originally issued at its face value Bonds are redeemed at their face value at maturity Market rates of return and yields to maturity are compounded semiannually.
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Manuel bought a $100,000 bond with a 5.5%coupon for $92,450 when it had five years remaining to maturity. What was the prevailing market rate at the time Manuel purchased the bond?
Bond interest is paid semi-annually
The bond was originally issued at its face value
Bonds are redeemed at their face value at maturity
Market
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- Vincent purchased a $3,500 bond that was paying a 5.50% coupon rate and had 4 more years to mature. The yield at the time of purchase was 4.20% compounded semi-annually. a. How much did Vincent pay for the bond? Round to the nearest cent b. What was the amount of premium or discount on the bond?A $8,500 bond had a coupon rate of 5.75% with interest paid semi-annually. Gregory purchased this bond when there were 9 years left to maturity and when the market interest rate was 6.00% compounded semi-annually. He held the bond for 4 years, then sold it when the market interest rate was 5.50% compounded semi-annually. a. Calculate the purchase price of the bond. b. Calculate the amount that Gregory received when he sold the bondA $1,000 par value bond was issued 20 years ago at a 9 percent coupon rate. It currently has 5 years remaining to maturity. Interest rates on similar debt obligations are now 10 percent. Compute the current price of the bond using an assumption of semiannual payments. If Mr. Robinson initially bought the bond at par value, what is his percentage loss (or gain)? Now assume Mrs. Pinson buys the bond at its current market value and holds it to maturity, what will her percentage return be? Although the same dollar amounts are involved in parts b and c,explain why the percentage gain is larger than the percentage loss.
- You purchased a 5-year, 6% annual-coupon bond with $1,000 par value. The yield to maturity at the time of purchase was 4%. You sold the bond after one year, right after receiving the first coupon payment. The bond's yield to maturity was 3.3% when you sold it. What is your holding period return on the bond? Enter your answer as a decimal, rounded to four decimal placesHelp me pleaseSan Miguel Company's 18-year, $1,000 par value bonds pay 6.5 percent interest annually. The market price of the bond is $1,105, and your required rate of return is 8.5 percent. a. Compute the bond's expected rate of return. b. Determine the value of the bond to you given your required rate or return. c. Should you purchase the bond? Why or why not? (*You must show your calculation process as well.)
- The Saleemi Corporation's $1,000 bonds pay 6 percent interest annually and have 11 years until maturity. You can purchase the bond for $1,155. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 3 percent?An investor bought a $8,500 bond with a coupon rate of 5.5% compounded semi- annually. At the time of purchase, the bond had a yield rate of 5.0% and nine years until maturity. Three years later, the investor sold the bond when the yield to maturity was 6.3%. a. At what price did the investor purchase the bond? $0.00 Round to the nearest cent b. At what price did the investor sell the bond? $0.00 Show Transcribed Text $0.00 Round to the nearest cent b. At what price did the investor sell the bond? $0.00 Round to the nearest cent c. What was the investor's capital gain or loss on the investment? $0.00 Round to the nearest centSolve by Formula. Three years ago, ABC Company issued 10-year bonds that pay 5% semiannually. a. If the bond currently sells for $1,045, what is the yield to maturity (YTM) on this bond? b. If you are expecting that the interest rate will drop in the near future and you want to gain profit by speculating on a bond, will you buy or sell this bond? Why?
- An investor bought a $7,500 bond with a coupon rate of 5.3% compounded semi-annually. At the time of purchase, the bond had a yield rate of 4.4% and nine years until maturity. Four years later, the investor sold the bond when the yield to maturity was 5.5%. a. At what price did the investor purchase the bond? b. At what price did the investor sell the bond? c.What was the investor's capital gain or loss on the investment?A $5,500 bond had a coupon rate of 4.75% with interest paid semi-annually. Sarah purchased this bond when there were 8 years left to maturity and when the market interest rate was 5.00% compounded semi-annually. He held the bond for 4 years, then sold it when the market interest rate was 4.50% compounded semi-annually. a. What was the purchase price of the bond? Round to the nearest cent. b. What was the selling price of the bond? Round to the nearest cent. c. What was Sarah's gain or loss on this investment? (click to select)GainLoss amount was $A $8,500 bond had a coupon rate of 5.75% with interest paid semi-annually. Christopher purchased this bond when there were 8 years left to maturity and when the market interest rate was 6.00% compounded semi-annually. She held the bond for 3 years, then sold it when the market interest rate was 5.50 % compounded semi- annually. a. What was the purchase price of the bond? -$8,365.25 X Round to the nearest cent. b. What was the selling price of the bond? $0.00