Suppose John purchased an annual coupon bond with a face value of $1000, a coupon rate of 8% and 10-year maturity. Four years after the purchase, immediately before the fourth coupon payment, he decides to sell the bond. At that time, the interest rate has fallen to 6%. What is the fair value of the bond at that time (within $10)? 1098 1118 1138 1158 None of the above

Suppose John purchased an annual coupon bond with a face value of $1000, a coupon rate of 8% and 10-year maturity. Four years after the purchase, immediately before the fourth coupon payment, he decides to sell the bond. At that time, the interest rate has fallen to 6%. What is the fair value of the bond at that time (within $10)? 1098 1118 1138 1158 None of the above

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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Jorge Cabrera paid $1,100 for a 15-year bond 10 years ago. The bond pays a coupon of 8 percent semiannually. Today, the bond is priced at $1,332.95. If he sold the bond today, what would be his realized yield? 10.36% 10.36% 4.32% none of these O8.65%
Mansukh
Perpetual Life Corp. has issued con sol bonds with coupon payments or $60. (Con sols pay interest forever and never mature. They are perpetuities.) If the required rate of return on these bonds at the time they were issued was 6 percent. at what price were they sold to the public!
you bought a 30-year bonds many years ago. The bond has par value of $ 1,000 and coupon rate of 12%, paid semi-annually. The current price of the bond is $1,137.99 and the yield to maturity is 10%. How many years ago did yoy buy the bond Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure
A client owns a $1,000 10-year bond. The coupon rate is 6 percent. The client acquired the bond three years ago at a discount. What is knwon about the interest rates three years ago? A. The stated rate was less than 6 percent. B. The stated rate was more than 6 percent. C The market rate was less than 6 percent. D. The market rate was more than 6 percent.
Five years ago, you purchased a $1,000 par value corporate bond with an interest rate of 5 percent. Today, comparable bonds are paying 7 percent. What is the approximate dollar price for which you could sell your bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) D Approximate market value.
Kevin Rogers is interested in buying a five-year bond that pays a coupon of 8.5 percent on a semiannual basis. The current market rate for similar bonds is 6.9 percent. What should be the current price of this bond? (Do not round intermediate computations. Round your final answer to the nearest dollar.) O $1,067 O $1,099 O $965 O $982
ART Vandelay Inc. has two different bonds currently outstanding. Bond A has a face value of $40,000 and matures in 20 years. The bond makes no payment for the first 6 years, pays $2000 semiannually for the subsequent eight years, and finally $2500 semiannually for the last 6 years. Bond B also has a value of $40,000 and matures in 20 years. However, it makes no coupon payments over the life of the bond. If the stated annual interest rate is 12%, compounded semiannually, a. What is the current price of Bond A? b. What is the current price of Bond B?
A zero-coupon bond pays no interest during its lifetime. Upon maturity, the investor receives face value. The purchase price determines the rate of return. (a) Henri paid $10,750 for a $20,000 face value zero-coupon bond that matures in 10 years. Find the annual compound rate of interest received. (Round your answer to two decimal places.) % (b) Sandi plans to purchase a zero-coupon bond with a face value of $10,000 and matures in 7 years. She wants to earn 7.1% compounded annually. Find the price. she should pay. (Round your answer to two decimal places.) Additional Materials
Jay purchased a Treasury bond with a coupon rate of 4.49% and face value of $100. The maturity date of the bond is 15 March 2029. (b) In fact, Yuri changes his plan and Jay plans to sell this bond on 7 January 2022. What was Jay's sale price (rounded to four decimal places)? Assume a yield of 3.02% p.a. compounded half - yearly. Question Answer a. 111.6359 b 110.8412 c. 109.1924 d .108.7396
Three years ago you purchased a 8% coupon bond that pays semiannual coupon payments for $965. What would be your bond equivalent yield if you sold the bond for current market price of $1,044? Your bond equivalent yield, if you sold the bond for current market price, is nothing%. (Round to two decimal places.)
2. An investor buys a 10 year $10,000, 8% coupon, semiannual pay bond for $9,100. He sells it three years later, just after receiving the sixth coupon payment, when its yield to maturity is 5.6%. What would be the bond price at the time of sale?

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