Problem 6-4 (LG 6-2)On October 5, 2022, you purchase a $10,000 Treasury-note that matures on August 15, 2031 (settlement occurs one day afterpurchase, so you receive actual ownership of the bond on October 6, 2022). The coupon rate on the Treasury-note is 4.380 percentand the current price quoted on the bond is 105.40625 percent. The last coupon payment occurred on May 15, 2022 (144 days beforesettlement), and the next coupon payment will be paid on November 15, 2022 (40 days from settlement).a. Calculate the accrued interest due to the seller from the buyer at settlement.b. Calculate the dirty price of this transaction.(For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))Amounta. Accrued interest duecesb. Dirty price

Clean price is referred as the price of the bonds that is without any interest. Whereas, the dirty…

Answered: On October 5, 2022, you purchase a…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Problem 3: Callable Bonds: On Jan. 1, 2021, Z Corporation paid P3,300,000 for a 9%, P3,000,000 face value bond. The bond pays interest every June 30 and Dec. 31, and is due on Dec. 31, 2028. However, Z foresees that the issuer will likely call the bonds on Dec. 31, 2026 for a call price of 103. As a financial analyst, you deem it appropriate to use a risk-adjusted return of 11% for Z’s investment. Based on your analysis, how much did Z overpay or (underpay) for its investment?
On Monday 6 March, 2023 you purchase a $1,000 Treasury bond that matures on May 15, 2031 (settlement now occurs one day after purchase, so you receive actual ownership of the bond on Tuesday 7 March, 2023). The coupon rate is 4.0 percent and the current price quoted on the bond is 101.233 percent of par (in dollar terms, $1.012.33). The last coupon payment occurred on November 15, 2022, and the next coupon payment will be paid on May 15, 2023. Calculate the dirty price. Hint: Do NOT round your intermediate steps
Related to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 8 percent interest annually and have 15 years until maturity. You can purchase the bond for $1,075. 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 6 percent? Question content area bottom Part 1 a. The yield to maturity on the Saleemi bonds is enter your response here%. (Round to two decimal places.) Part 2 b. You ▼ should should not purchase the bonds because your yield to maturity on the Saleemi bonds is ▼ greater less than the one on a comparable risk bond. (Select from the drop-down menus.)
Give typing answer with explanation and conclusion 1- Imagine the bond above displayed the following details: $10,000 Matures: January 31, 2030; Interest of $200 payable June 30 and December 31 of each year. Can you calculate the annual effective interest rate for this bond? a)2% b)4% c)6% d)One cannot tell.
4 A $1,000.00, 8.0% Semi-Annual Bond matures on October 1, 2036. The Bond may be called at 102.5 on April 1, 2030. Round ALL final answers to the nearest penny (cent), NO dollar signs, USE commas where needed What is the Value of the bond on April 1, 2024, when the market rate is 7.0% if: The bond is held to maturity and redeemed at par? The bond is called on April 1, 2030 and redeemed at the call value?
(Related to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 12 percent interest annually and have 11 years until maturity. You can purchase the bond for $945. 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 14 percent? Question content area bottom Part 1 a. The yield to maturity on the Saleemi bonds is enter your response here%. (Round to two decimal places.)
IFRS TEST BANKOn 1/1/2020, Al Maaref Company issued a loan bond with an interest rate of 8% and a nominal value of 1,500,000 dinars, and the value of the bond will be redeemed on 12/31/2023 with a substantial premium. The direct costs of issuing this bond amounted to 40,000 dinars. If you know that the effective interest rate on similar bonds, but without the condition of redemption at a substantial premium, is 12%, what is the balance of the loan bond as of 12/31/2022 (to the nearest thousand): 1. 1,622,000 dinars 2. 1,382,000 dinars 3. 1,577,000 dinars 4. 1,413,000 dinars
A4) Finance On August 16, 2012, a bond had a market price of $8,240.66 and accrued interest of $157.95 when the market rate was 8%What is the bond's face value if it matures on May 15, 2033?
7. Suppose a bond is purchased with a settlement date of October 15 and the next coupon payment is on December 1. The par amount purchased on the bond is $100,000, and its annual coupon rate is 4% paid semiannually. (1) What is the accrued interest using the 30/360-day count convention? (2 points) (2) What is the accrued interest using the actual/actual day count convention? (2 points)
7. Suppose a bond is purchased with a settlement date of October 15 and the next coupon payment is on December 1. The par amount purchased on the bond is $100,000, and its annual coupon rate is 4% paid semiannually. (1) What is the accrued interest using the 30/360-day count convention? (2) What is the accrued interest using the actual/actual day count convention?
You have purchased a U.S. Treasury bond for $3,150.00. No payments will be made until the bond matures 10 years from now, at which time it will be redeemed for $5,150. What interest rate will you earn on this bond? Group of answer choices 6.18% 5.04% 3.73% 5.67% 4.46%
On 7/10/22, you purchase a $10,000 T-note that matures on12/31/28 (settlement occurs one day after purchase, so you receive actualownership of the bond on 7/11/22). The coupon rate on the T-note is 2.125%and the current price quoted on the bond is 98.250%. The last coupon paymentoccurred on 6/30/22 (11 days before settlement) and the next coupon paymentwill be paid on 12/31/22 (173 days from settlement). a) Calculate the accrued interest due to the seller from the buyer atsettlementb) Calculate the dirty price of this transaction

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