The nation of Qatar just issued a perpetual bond. The bond will pay $1,000 in one year and that will grow at 1%/year forever. Because Qatar has more natural gas than any nation in the world, it is a very safe investment and the appropriate discount rate is 4%. Under these facts, what is the appropriate price for this perpetual bond? Choose the closest. a. $20,000 b. $25,000 c. $33,333 d. $50,333

4. Suppose that an investment institution offers you two kinds of bonds and you are willing to take one of them. The first bond, called 'Bond A1' pays you $5000 in 10 years, while the second bond, called 'Bond B1' pays you the same amount but in 20 years. а. If the interest rate is 5%, what is the value of each bond today? Which bond is worth more? Why? b. If the interest rate increases to 8%, what is the value of each bond? Which bond has a larger percentage change in value? After knowing the answer of A and B, you will С. be able to complete this sentence: "The value of bond [rises / falls] when the interest rate increases, and bonds with longer time to maturity are [more/less] sensitive to changes in the interest rate"

For the next 5 questions, assume that the economy starts in equilibrium:-the output is 1 million-the equilibrium price of a one-year, $100 bond is $96-the money supply is 1 trillion-the price level is 125 1.What is the interest rate in this economy?   a 4.67% b 4.00% c 5.03% d 4.17% 2. The Federal Reserve decides to sell bonds and there is a change in the equilibrium bond price. What bond price is most likely?   a not enough information b 97 c 96 d 95 3. After the bond price change in the previous question, the interest rate will _, causing the aggregate expenditure curve to _ because _ will __.   a decrease , increase , autonomous consumption and planned investment spending , increase b increase , decrease , autonomous consumption and planned investment spending , increase c increase , decrease , autonomous consumption and planned investment spending , decrease d decrease , increase, government…

Compute how much interest a company would pay in 2023 on a 5-year, $500,000+U dollar loan (which it takes out today and has all principal due in 2028) that has an interest rate contractually set to equal 2.50% above the 1-year Treasury bond yield on June 15 each year if that specified T-bond rate turns out to be 9.23% on June 15, 2023. U=44

The company HelloCustomer is afraid of another Corona lockdown and wants to safeguard some liquidity. Therefore it issues a bond with a face value of EUR 100 million at a price of 97.9 and a maturity of 9 years. The coupon payment is USD 1 million each year and the payment annually. The current exchange rate is 1 EUR = 1.22 USD. After 9 years the company promises to pay back the full notional amount. In addition the bond has a call option after 3 years. What is the yield to call? Please also explain how you calculated it.

You are the Chief Financial Officer of Toujours SA, a company listed on the Paris stock exchange. You would like to issue perpetual debt; that is a bond which makes one coupon payment at the end of every year forever. The market yield on similar bonds is 4%. If you seek to raise €1.0bn from the bond, what will the coupon payment be every year?      a €10m   b €40m   c I do not want to answer this question.   d €100m   e €400m   f More information is needed to answer the question.

How do I figure out NPV? $30 Million Investment in Bonds Rationale for investment: The business that’s offering these bonds for sale contracts with another business in China to assemble computer components. The Chinese business is known to have used child labor in the past, but claims it has stopped this practice. However, the U.S. business selling these bonds has not investigated to verify whether these claims are true or not. Assumptions to consider:  10-year bond  8% coupon Priced at a discount: $95 Discount rate is 9% Is the initial investment $30 million?  How do I find the annual cash inflows? Is the principal returned $30 million?

A Canadian bank that issues  AUD 250M 5-year bonds to  fund  AUD 200M loans with 6-year maturity  is exposed to the following risks : A depreciation of the Australian dollar against the Canadian plus credit plus liquidity risk plus reinvestment risk, i.e. decreasing interest rates. A depreciation of the Australian dollar against the Canadian dollar, plus credit risk plus liquidity risk plus refinancing risk, i.e. increasing interest rates. An appreciation of the Australian dollar against the Canadian dollar, plus credit risk plus  refinancing risk, i.e. increasing interest rates. An appreciation of the Australian dollar against the Canadian dollar, plus credit risk plus reinvestment risk, i.e. decreasing interest rates.

You bought Japanese government bond yesterday by paying 600,000 yen.  The bond offers you 24,000 yen in year 1, 24,000 yen in year 2 and 624,000 yen in year 3. (1)   How much is the internal rate of return (interest rate) of this bond?  Answer should be in percentage. Write an answer like one of the examples.  <Example>  2 or 2.0          Answer %   (2)   If the market interest rate goes up today, which of the following three explanations is correct? You can sell the bond today only below 600,000 yen. You can sell the bond today at 600,000 yen. You can sell the bond today above 600,000 yen.      (3)   If Mr. X buys your bond at 603,000 yen from you, how much is the internal rate of return (IRR) for Mr. X? IRR is the same as the answer of (1) in the above. IRR is below the answer of (1) in the above. IRR is above the answer of (1) in the above.

What would you pay for a HK$50,000 debenture bond that matures in 15 years and pays HK$5,000 a year in interest if you wanted to earn a yield of: (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Click here to view the factor table. (a) 10%? (Round answer to O decimal places, e.g. 458,581.) Amount to pay HK$