Required: Fill in the table below for the following zero-coupon bonds, all of which have par values of $1,000. Assume annual compounding. (Do not round intermediate calculations. Round your answers to 2 decimal places.) $ $ $ $ Price 310 690 410 590 Maturity (years) Yield to Maturity 20 20 10 11 15 % % % 11.00 % 14.00% 8.00 %

Required: Fill in the table below for the following zero-coupon bonds, all of which have par values of $1,000. Assume annual compounding. (Do not round intermediate calculations. Round your answers to 2 decimal places.) $ $ $ $ Price 310 690 410 590 Maturity (years) Yield to Maturity 20 20 10 11 15 % % % 11.00 % 14.00% 8.00 %

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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Only D & E please
There are two zero-coupon bonds below: Coupon Term to rate maturity 0% 1 year 10% 2 years Bond A B FV $100 $100 Price $95.24 $107.42 Consider a 2-year coupon bond C with FV = $100, coupon rate=25%, and price = $ 138. Is Bond C underpriced/overpriced relative to Bonds A and B? What is the potential arbitrage trading strategy? O a. Overpriced; Long 3/22 unit of A; Long 25/22 unit of B; Short 1 unit of C O b. Underpriced; Long 3/22 unit of A; Long 25/22 unit of B; Short 1 unit of C O c. Overpriced; Long 3 unit of A; Long 25 unit of B; Short 1 unit of C O d. Underpriced; Long 3 unit of A; Long 25 unit of B; Short 1 unit of C
Calculate the purchase price of the following bonds. Indicate whether the bonds are priced at a discount, at par or at a premium. Give your answers in dollars and cents to the nearest cent. Face Value Coupon Rate Years to Maturity Market Rate a) $100 r = 6.75% 5 j2 = 6.75% b) $1,000 r = 8% 11 j2 = 6.25% c) $10,000 r = 7% 20 j2 = 8.75% Quoted coupon rates and market rates are nominal annual rates compounded semi-annually. a)Price = $ This bond is priced at:a discountpara premium b)Price = $ This bond is priced at:a discountpara premium c)Price = $ This bond is priced at:a discountpara premium
Please answer all 4 prices with explanations thx
Consider the following $1,000 par value zero-coupon bonds: Bond Maturity A 1 BU C D Years until Yield to Interest rate 2 3 Maturity (years) 1 2 3 4 Maturity 8.00% 9.00 9.50 10.00 Required: a. According to the expectations hypothesis, what is the market's expectation of the one-year interest rate three years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What are the expected values of next year's yields on bonds with maturities of (a) 1 year; (b) 2 years; (c) 3 years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) YTM Check my work % % % %
Rolling Company bonds have a coupon rate of 6.20 percent, 25 years to maturity, and a current price of $1,196. What is the YTM? The current yield? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) YTM % Current yield %
A firm's bonds have a maturity of 14 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 7 years at $1,064.47, and currently sell at a price of $1,119.43. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: YTC: % -Select- v % What return should investors expect to earn on these bonds? I. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM. II. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. III. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. IV. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM.
What is the YTM for a zero coupon bond ($1,000 par) maturing 18 months and 15 days from now selling for $900 today. Use semiannual rate approach. A. 7.19% B. 8.41% C. 6.94% D. 6.53% E. 7.81%
4) A 10 year bond with $50, 000 face value has semiannual coupon rate 4% and semiannual yield rate 2%. Fill out the following amortization table. Principle Outstanding t Payment Interest герaid Balance 1 2 3 12
A firm's bonds have a maturity of 8 years with a $1,000 face value, have an 8% semlannual coupon, are callable in 4 years at $1,048.54, and currently sell at a price of $1,094.91. What are their nominal yield to maturity and their nominal yield to call? Do not round Intermediate calculations. Round your answers to two decimal places. YTM: YTC: What return should investors expect to earn on these bonds? I. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. II. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. III. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM. IV. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM. -Select-
6. The Mariposa Co. has two bonds outstanding. One was issued 25 years ago at a coupon rate of 9%. The other was issued 5 years ago at a coupon rate of 9%. Both bonds were originally issued with terms of 30 years and face values of $1,000. The going interest rate is 14% today. a. What are the prices of the two bonds at this time? b. Discuss the result of part (a) in terms of risk in investing in bonds.
Review the Bond Table below; all bonds have semi-annual payments. Security. Coupon Rate Face Value 0.00% $1,000 4.50% $1,000 5.00% $1,000 $1,000 1-yr Treasury 5-yr Treasury 10-yr Treasury 5-yr Corporate (rated A) Multiple Choice 10-year Corporate 8.40% (rated BBB) What is the BBB Default Risk Premium (rdp-BBB)? O O 4.80% 1.75% 2.20% 2.75% 3.40% None of the above Price $ 965.90 $991.18 $976.94 $912.46 $1,000 $1,044.66

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