Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:The following bond was quoted in The Wall Street Journal:
Net change
close
100.875%
Current yield
Volume
Bonds
NJ 4.125% 35
1.7%
+1.0625%
Five bonds were purchased yesterday, and 5 bonds were purchased today. How much more did the 5 bonds cost today? (Do not
round intermediate calculations. Round your answer to the nearest cent.)
Increased cost
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- Problem #2. Find the total proceeds from the sale of 15 bonds with a coupon rate of 8.25 and a current price of 92.465. The commission charge is $5.00 per bond. The date of the transaction is 145 days since the last interest payment. Show your work.arrow_forwardAlpesharrow_forwardIn the past, Abbott Labs had two bond issues outstanding with the following characteristics. Issue Interest Rate Maturity Current Price A 6% 2008 115 B 6% 2012 118 Answer the following the questions regarding these bond issues. Assume that the bonds of both issues had a face value of $1000 each. How much cash did each bond from issue A provide investors in 12 months? How much cash did each bond from issue B provide in 12 months?arrow_forward
- The following bond was quoted in The Wall Street Journal: Bonds Current yield Volume Close Net change NJ 4.125% 35 0.1% 76.875% +1.2% Five bonds were purchased yesterday, and 5 bonds were purchased today. How much more did the 5 bonds cost today? (Do not round Intermedlate calculatlons. Round your answer to the nearest cent.) Increased costarrow_forwardYou are considering an investment in 30-year bonds issued by Moore Corporation. The bonds have no special covenants. The Wall Street Journal reports that 1-year T-bills are currently earning 3.25 percent. Your broker has determined the following information about economic activity and Moore Corporation bonds: (LG 2-6) Real risk-free rate=2.25% Default risk premium = 1.15% Liquidity risk premium - 0.50% = Maturity risk premium = 1.75% a. What is the inflation premium? b. What is the fair interest rate on Moore Corporation 30-year bonds?arrow_forwardFind the total proceeds (in $) from the sale of 30 bonds with a coupon rate of 8.75 and a current price of 96.575. (Round your answer to the nearest cent.) The commission charge is $6.00 per bond. The date of the transaction is 145 days since the last interest payment. 2$arrow_forward
- Find the total proceeds (in $) from the sale of 30 bonds with a coupon rate of 8.75 and a current price of 96.575. (Round your answer to the nearest cent.) The commission charge is $6.00 per bond. The date of the transaction is 145 days since the last interest payment. $2821.53 xarrow_forwardGive typing answer with explanation and conclusionarrow_forwardMansukharrow_forward
- Calculate the accrued interest (in $) and the total purchase price (in $) of the bond purchase. (Round your answers to the nearest cent.) Time Since Last Interest Company Company 2 Coupon Market Rate Price 9.4 79.75 23 days $ Accrued Interest Commission per Bond $9.35 Bonds Purchased 15 69 Total Pricearrow_forwardall subpartsarrow_forwardDangerarrow_forward
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