stant Growth Model at time n What is the value of a 10 year, $1,000 par value bond issued by The American Express Corporation with a coupon rate of 2.83% paid semiannually based on current 10 year yield rate of 2.5%? Bond Value $: If the Modified Duration of the bond is question 4 is 1.50, calculate the approximate $ change in bond price if the Fed next move is to increase interest rate by 25 bps (25%) [Make sure your change in Bond Price is the correct sign] Change in Bond Price $:
stant Growth Model at time n What is the value of a 10 year, $1,000 par value bond issued by The American Express Corporation with a coupon rate of 2.83% paid semiannually based on current 10 year yield rate of 2.5%? Bond Value $: If the Modified Duration of the bond is question 4 is 1.50, calculate the approximate $ change in bond price if the Fed next move is to increase interest rate by 25 bps (25%) [Make sure your change in Bond Price is the correct sign] Change in Bond Price $:
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
Related questions
Question
![20
21 3) Assumed XYZ is a fast growing Technology Company. You believe that the data given in Question 1 will persist for the next 3 years. But, beyond the next 3 Year, you believe it
22 will grow at a normal economic growth rate. Your economic forecast for U.S, economy is 1.5% growth annually. Recalculate your Fair Value of XYZ
23
24
25
26
27
8
9
0
1
2
34)
4
5
Fair Value Based on 2 Stage DDM is
DPS*(1+g)
Present Value
1.00
77) Microsoft Corporation's (ET)
2.00
3.00
Terminal
value
"The terminal value calculated using the Gordon Constant Growth Model at time n
What is the value of a 10 year, $1,000 par value bond issued by The American Express Corporation with a coupon rate of 2.83% paid semiannually based on current 10 year
yield rate of 2.5%?
Bond Value $
If the Modified Duration of the bond is question 4 is 1.50, calculate the approximate $ change in bond price if the Fed next move is to increase interest rate by 25 bps
(25%) [Make sure your change in Bond Price is the correct sign]
Change in Bond Price $
6
75)
B
9
D
1
2
36) Microsoft Corporation (MSFT) is currently trading at $53.93. You are holding a long Put with a strike price of $50.00. Let's assumed you have also paid $5 premium for the Long
Put [Make sure your profit is the correct sign: negative for a loss]
Profit or Loss $:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F273f1801-e694-402a-b20f-c60a1c95ace4%2Ff75f4bea-1c8c-4776-9553-2a9d31b573c9%2Fm8rqew_processed.png&w=3840&q=75)
Transcribed Image Text:20
21 3) Assumed XYZ is a fast growing Technology Company. You believe that the data given in Question 1 will persist for the next 3 years. But, beyond the next 3 Year, you believe it
22 will grow at a normal economic growth rate. Your economic forecast for U.S, economy is 1.5% growth annually. Recalculate your Fair Value of XYZ
23
24
25
26
27
8
9
0
1
2
34)
4
5
Fair Value Based on 2 Stage DDM is
DPS*(1+g)
Present Value
1.00
77) Microsoft Corporation's (ET)
2.00
3.00
Terminal
value
"The terminal value calculated using the Gordon Constant Growth Model at time n
What is the value of a 10 year, $1,000 par value bond issued by The American Express Corporation with a coupon rate of 2.83% paid semiannually based on current 10 year
yield rate of 2.5%?
Bond Value $
If the Modified Duration of the bond is question 4 is 1.50, calculate the approximate $ change in bond price if the Fed next move is to increase interest rate by 25 bps
(25%) [Make sure your change in Bond Price is the correct sign]
Change in Bond Price $
6
75)
B
9
D
1
2
36) Microsoft Corporation (MSFT) is currently trading at $53.93. You are holding a long Put with a strike price of $50.00. Let's assumed you have also paid $5 premium for the Long
Put [Make sure your profit is the correct sign: negative for a loss]
Profit or Loss $:
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