Suppose that a 20-year 7% bond selling for $816 and held to maturity has reinvestment rate of 6%. Coupon is paid twice a year. Par value is $1,000. What is the annual total return?
Q: The nominal rate of return is ______% earned by an investor in a bond that was purchased for $963,…
A: Bond It is an obligation security, where borrowers issue securities to fund-raise from financial…
Q: What is the yield to maturity on a 10-year, 9 percent annual coupon, $1,000 par value bond that…
A: Yield to maturity(YTM) is the rate of return on bond that is obtained if bond is held till maturity.…
Q: Suppose you purchase a zero coupon bond with face value $1,000, maturing in 25 years, for $180. What…
A: Yield to maturity can be calculated by following function in excel =RATE (nper, pmt, pv, [fv],…
Q: Assume that a company issued a bond with $1,000 face value, 10% coupon rate, 20 years maturity, if…
A: Face Vale = 1000 Coupon = Coupon Rate × Face Value = 10 × 1000 = 100 Total Time Period = 20 years…
Q: A 11-year bond pays interest of $28.60 semiannually, has a face value of $1,000, and is selling…
A: Semi Annual Interest Time Period = 11 Years × 2 =22 semi annual periods Face Value = 1000 Price of…
Q: Bonds issued by the Etling Corporation have a price of $790.55 and a coupon rate of 8 percent which…
A: Yield to maturity Years 14 coupon amount (PMT) (1000*8%) 80 Face value (FV) 1000 Present…
Q: Find the value of a bond maturing in 10 years, with a $1,000 par value and a coupon interest…
A: A financial instrument with a fixed cost that helps a company to raise funds for business operations…
Q: Last year Carson Industries issued a 10-year, 15% semiannual coupon bond at its par value of $1,000.…
A: Yield: This is the earning power or the income generated through an investment. In bond market,…
Q: Assume that a company issued a bond with $1000 face value, 10% coupon rate, 20 years maturity. If…
A: Face value =$1000 Coupon rate =10% Coupon payment =$100 Time =20 years YTM =8% So, present value of…
Q: A 30-year bond with par value $1,000 has annual coupons and sells for 1,300. The write-down in the…
A: Bonds are a part of debt instruments having fixed time to maturity. Bonds carry two types of…
Q: Morin Company's bonds mature in 8 years, have a par value of $1,000, and make an annual coupon…
A: Bond price is the current worth of the future payments to be made. Future payments include coupon…
Q: A company plans to purchase a zero-coupon bond with a face value of $4,200,000, a time to maturity…
A: Zero coupon bonds are bond that do not pay coupon or interest before the maturity and only pays the…
Q: Kaiser industries has bonds on the market annual payments, with 14 years to maturity, a par value of…
A: Par value = $ 1000 Coupon rate = x Coupon amount (C) = 1000*X= 1000X Price (PV) = $ 1108.60 Yield…
Q: The semi-annual bonds of Delta Company have a coupon rate of 6%, a Yield to Maturity of 8%, a par…
A: Bonds are debt securities issued by Government or other companies, who seek to raise money from…
Q: A 9-year bond pays interest of $26.20 semiannually, has a face value of $1000, and is selling for…
A: B0 = Interest * PVCF @ YTM for 18 periods + Maturity Value * PVF @ YTM for 18th period
Q: Assume the bonds par is $1000. A 13 yr bond is selling at $1,040 and its coupn is paid semi…
A: Face value = 1000 YTM years = 13 YTM rate = 9% Present value = 1040
Q: A bond with a coupon rate of 6.5% (assume it is paid once annually), matures in 10 years at a value…
A: PRESENT VALUE (CURRENT MARKET PRICE) 695 NPER (n) (MATURITY YEARS) 10 PMT (COUPON AMOUNT) 65…
Q: A semi-annual coupon bond has MacD of 26.4 years, yield-to-maturity of 4.4%, and price of $1178.57.…
A: Dollor value=Modified duration*Current price*1 percent change in YTMDollar value=-26.4*1178.57*0.01…
Q: The
A: Given in question Face value $1,000 Call price $ 1,070 Call year 5 Coupon rate 11% semi annual…
Q: Suppose you’ve purchased a 5-year bond with a face value of $1,000 and a coupon of 10% in the…
A: Bond is a long-term debt instrument used by entities to raise debt from public-at-large. Fixed…
Q: A 10 year bond pays interest of $28.20 semiannually, has a face value if $1000, and is selling for…
A: Bonds are debt security which is generally issued by corporates or governments to arrange funds.…
Q: Calculate the convexity of a $1,000 par value bond, with a coupon rate of 9% that matures in 4 years…
A: given, r=10% n=4 coupon rate =9% par =1000
Q: find the present value of a 2 year bond that pays a semi annual coupon has a coupon rate of 6…
A: Bond is a long-term debt instrument that is used by organizations to raise debt funds from public.…
Q: What is the current value of a $1,000 par value 10-year bond with a 7% coupon rate and its interest…
A: Following details are given in the question regarding a bond: Coupon rate = 7% Time period = 10…
Q: New Markets has $1,000 face value bonds outstanding that pay interest semiannually, mature in 20…
A: Working note:
Q: A 12-year, 5 percent coupon bond pays interest annually. The bond has a face value of $1,000. What…
A: First we need to calculate price of bonds at given yields it is calculated using pv function in…
Q: The Brownstone Corporation's bonds have 5 years remaining to maturity. Interest is paid annually,…
A: In this question we need to compute the Yield to maturity in both part (A) and part (B) given…
Q: Renfro Corporation’s bonds will mature in 10 years. The bonds have a face value of $1,000 and an 8%…
A: BondIt is the instrument of the indebtedness of an issuer of the bond to the holders of the bond
Q: Calculate the yield to maturity of both bonds. All else being equal, explain which bond the issuing…
A:
Q: Wilsons company bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have…
A: Nper = Number of years = 12 PMT = Coupon = 1000*10% = 100 PV = present value = -850 FV = Future…
Q: A bond with a coupon rate of 6.5% (assume it is paid once annually), maturing in 10 years at a value…
A: The current yield is providing the current profitability of the bond value. The value of the bond is…
Q: Company B has a bond outstanding that pays a 8% coupon. The interest is paid semi-annually, and the…
A: Current yield can be calculated by dividing the coupon amount with current selling price of bond.…
Q: A three-year bond is issued with a 9% coupon paid annually, and a maturity value of £100. If the…
A: Par value = £100 Coupon rate = 9% Coupon rate = 100*0.09= £9 Yield to maturity = 12% Years to…
Q: Harrimon Industries bonds have 6 years left to maturity. Interest is paid annually, and the bonds…
A: Given: Bond value= $1,000 Coupon rate = 10% Maturity period= 6 years Market price = $865
Q: the
A:
Q: Perry Inc. bonds sell at $1,150, they have a mature in 6 years, an annual coupon of $85 and par…
A:
Q: What is the yield to maturity, to the nearest percent, for the following bond: current price is…
A: Bonds are the financial instruments that are issued financial institution to raise funds from…
Q: You purchased a bond for 725. The bond has a coupon rate of 8 percent, which is paid semiannually.…
A: Expected rate of return is Yield to maturity. Data given: ( Assumed all figures are in $) i) Face…
Q: What is the yield to maturity for the following bond: current price is $908, coupon rate is 11…
A: Here, Present value (PV) = $908 Maturity value (FV) = $1,000 Coupon rate = 11% Time to maturity (n)…
Q: A bond has a $1,000 face value, a market price of 1,036, and pays interest payments of $70 every…
A: Given details are : Face value = $1000 Market price = $1036 Interest payment every year = $70 From…
Q: The nominal rate of return is % earned by an investor in a bond that was purchased for $901, has an…
A: Given information: Purchase price : $901 Selling price : $1031 Face value : $1,000 Annual coupon :…
Q: 1-annually, has 17 years remaining to maturity, and has a coupon rate of 6.00%. If the bond sells…
A: Yield To Maturity: It is the total rate earned for holding the bond till its maturity. This yield to…
Q: suppose a company issues $10,000 face value discount bond maturing in one year What's the price of…
A: Discount Bond is sold at price below par value with no interest payments and difference between…
Q: A 30,000, 6% bond with coupons payable quarterly is redeemable at par at the end of 8 years. The…
A: Face value = 30,000 Coupon rate = 6% Quarterly coupon amount = 30,000*0.06/4 = 450 Years to maturity…
Q: A 15-year bond has a $1,000 par value bond, a 4 percent coupon, and a yield to maturity of 3.3…
A: Calculating the current price of bond. We have,Current price of bond = C [1 – (1 / (1+r)n ] / r +…
Q: A 10 year bond with 5% annual coupon and $1,000 par value sells for $1,200. What is the…
A: Face value = $1000 Duration (n) = 10 years Coupon = 5% of $1000 = $50 Bond price = $1200 Let r =…
Suppose that a 20-year 7% bond selling for $816 and held to maturity has reinvestment rate of 6%. Coupon is paid twice a year. Par value is $1,000. What is the annual total return?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Suppose you purchase a 10-year bond with 6% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.01% when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per $100 face value? b. What is the internal rate of return of your investment? Note: Assume annual compounding. The cash flow at time 1-3 is $ (Round to the nearest cent. Enter a cash outflow as a negative number.) (Round to the nearest cent. Enter a cash outflow as a negative number.) The cash outflow at time 0 is $ The total cash flow at time 4 (after the fourth coupon) is $ negative number.) b. What is the internal rate of return of your investment? (Round to the nearest cent. Enter a cash outflow as aSuppose you purchase a ten-year bond with 12% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 10.64% when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per $100 face value? b. What is the internal rate of return of your investment? Note: Assume annual compounding. a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flow at time 1-3 is $ (Round to the nearest cent. Enter a cash outflow as a negative number.) The cash outflow at time 0 is $ number.) (Round to the nearest cent. Enter a cash outflow as a negative The total cash flow at time 4 (after the fourth coupon) is $. (Round to the nearest cent. Enter a cash outflow as a negative number.) b. What is the internal rate of return of your investment? The internal rate of return of your investment is %. (Round to two decimal…Suppose you purchase a 10-year bond with 6% annual coupons. You hold the bond for fouryears, and sell it immediately after receiving the fourth coupon. If the bond’s yield to maturitywas 5% when you purchased and sold the bond,a. What cash flows will you pay and receive from your investment in the bond per $100 face value?b. What is the internal rate of return of your investment?
- Suppose you purchase a 10-year bond with 6.1 % annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.7 % when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per $ 100 face value? b. What is the annual rate of return of your investment?What is the value of a bond that matures in 5 years, has an annual coupon payment of OMR 110, and a par value of OMR 2,000? Assume a required rate of return of 9%.Suppose you purchase a 10-year bond with 6.3% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.6% when you purchased and sold the bond, a. what cash flows will you pay and receive from your investment in the bond per $100 face value? b. what is the annual rate of return of your investment? Cash Flows - $113.39 $6.30 $6.30 $6.30 b. What is the annual rate of return of your investment? The annual rate of return of your investment is %. (Round to one decimal place.) $115.04
- Consider a 10-year bond with a face value of $1,000 that has a coupon rate of 5.5%, with semiannual payments. a. What is the coupon payment for this bond? b. Draw the cash flows for the bond on a timelineSuppose you purchase a 10-year bond with 6.64% annual coupons. You hold the bond for 4 years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 5.17% when you purchased and sold the bond, a. what cash flows will you pay and receive from your investment in the bond per $100 face value? b. what is the annual rate of return of your investment? a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flows from the investment are shown in the following timeline: (Round to the best choice below.) OA. Years Cash Flows O B. Years C. Years Cash Flows Cash Flows - $114.06 O D. Years 0 Cash Flows $107.42 0 0 - $111.26 0 $111.26 1 $6.64 1 $6.64 1 $6.64 1 $6.64 2 $6.64 2 + $6.64 2 + $6.64 2 + $6.64 3 $6.64 3 $6.64 3 $6.64 3 $6.64 b. What is the annual rate of return of your investment? The annual rate of return of your investment is %. (Round to two decimal places.) 4 $114.06 4 $107.42 4 $114.06 4…Suppose that a 5-year 6% bond is purchased between the issuance date and the first coupon date. The days between the settlement date and the next coupon period is 60. There are 90 days in the coupon period given that the coupons are paid quarterly. Suppose the discount rate is 4%. What is the dirty price, clean price, and accrued interest?
- Suppose you purchase a 10-year bond with 6.19% annual coupons. You hold the bond for 4 years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 5.34% when you purchased and sold the bond, a. what cash flows will you pay and receive from your investment in the bond per $100 face value? b. what is the annual rate of return of your investment? a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flows from the investment are shown in the following timeline: (Round to the best choice below.) A. Years 2 3 Cash Flows $106.46 $6.19 $6.19 $6.19 $110.46 B. Years 0 2 3 4 Cash Flows - $106.46 $6.19 $6.19 $6.19 $110.46 C. Years 0 1 2 3 4 Cash Flows $104.27 $6.19 $6.19 $6.19 $110.46 D. Years 0 2 3 4 + $6.19 $6.19 $6.19 $104.27 Cash Flows - $110.46 b. What is the annual rate of return of your investment? The annual rate of return of your investment is %. (Round to two decimal places.)Suppose you purchase a 10-year bond with 6.19% annual coupons. You hold the bond for 4 years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 5.34% when you purchased and sold the bond, a. what cash flows will you pay and receive from your investment in the bond per $100 face value? b. what is the annual rate of return of your investment? a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flows from the investment are shown in the following timeline: (Round to the best choice below.) A. Years 0 2 3 4 Cash Flows $106.46 $6.19 $6.19 $6.19 $110.46 B. Years 0 2 3 4 Cash Flows - $106.46 $6.19 $6.19 $6.19 $110.46 ○ C. Years 0 2 3 4 Cash Flows $104.27 $6.19 $6.19 $6.19 $110.46 D. Years 0 2 3 4 Cash Flows - $110.46 $6.19 $6.19 $6.19 $104.27 b. What is the annual rate of return of your investment? The annual rate of return of your investment is %. (Round to two decimal places.)suppose a 30 year, pay coupon of 4% is priced to yield 5%. par = 1000. the bond pays its coupon annually. calculate the instrinsic value of the bond. decide whether the bond is at premium or discount? please show the calculation using excel