The spot rates for a zero coupon bond are as follows: 1 year 5% 2 year 5.5% 3 year 6% What is the value of the bond today, its face value is $1000, and pays annual coupons with a rate of 6%
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The spot rates for a zero coupon bond are as follows:
1 year 5%
2 year 5.5%
3 year 6%
What is the
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- Consider a 10-year bond with a face value of $1,000 that has a coupon rate of 5.9%, with semiannual payments. a. What is the coupon payment for this bond? b. Draw the cash flows for the bond on a timeline. a. What is the coupon payment for this bond? The coupon payment for this bond is $ (Round to the nearest cent.)If you have a coupon bond, its face value is $1,000 and the coupon rate is 4%. Complete the following table, then calculate the rate of return for the bond. If you know that it was purchased at the nominal value, comment on the results. due date return at maturity the price 2 0.02 3 0.04 5 0.06 Present Value Annuity value % n value % n 0.961 0.02 2 1.97 0.02 2 0.925 0.04 2 1.89 0.04 2 0.889 0.04 3 2.78 0.04 3 0.906 0.02 5 4.71 0.02 5 0.747 0.06 5 4.21 0.06 5Using the following spot rate for pricing the bond, what is the present value of a 3- year security that pays a fixed annual coupon of 6%? Year 1: 4.5% Year 2: 5.0% Year 3: 6.0% $1,010 O $1,002 $998
- There is a goverment bond that pays %16 annual coupon interest however the payments are semi-annually. The maturity of this bond is 6 years and the par value is 100 TL. Find the price of this bond when market interest rate is %12 ? Explain briefly the relationship between bond prices and bond yields?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 excelConsider a two-year bond with a face value $1000 and a coupon rate 4.2%paid annually.(a) On the market, the 2-year interest rate is 3%. What is the fair marketprice for this bond?(b) When the interest rate increases to 5%, what would the bond pricebecome?(c) What if the interest rate falls to 1%?
- A bond quotes a rate of return of 5% and will pay $1,000 in one year with a probability of 42% and $0 with a probability of 58%. part A)What is the time premium? part B)What is the default premium?Suppose a 6-year zero-coupon bond offers a payment of $1,800 and thecurrent market interest rate for this bond is 8%. What is the price of this bond?1. Suppose a 8-year bond has a face value of $1,000 and has a semi-annual YTM of 0.063. It pays semi-annual coupons of 8%. What is the bond’s price?
- 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 timelineA bond that matures in 7.5 years and pays semi-annual payments of 20.1 is priced at 98.70. What is the coupon rate if the face value is, as always, 1,000? ( well explain all point of question with proper answer).A 15 year, semi-annual bond has a coupon rate of 4%. The YTM is 4%. What is the bond's duration and is it selling at a premium, par, or discount?