What is the bond yield to naturity?

Q: a. What is the duration of a two-year bond that pays an annual coupon of 11.5 percent and has a…

A: A financial instrument that doesn’t affect the ownership of the common shareholders or management of…

Q: A bond has a $1,000 face value, a market price of $1,045, and pays semiannual payments of $42.25…

A: In this question we require to calculate the coupon rate of bond using following details: Face value…

Q: The current 1-year bond and 2-year bond interest rates are both 4% and the 1-year and 2-year term…

A: Given: 1 year interest rate = 4% 2 years interest rate = 4% 1 years premia = 0% 2 years premia = 1%

Q: What is the Maturity risk premium of a bond that matures in 8 years? answer in % without the symbol

A: Maturity Risk Premium: It represents the extra return demanded by an investor for bearing the risk…

Q: Bond A is zero- coupon bond paying $100 one year from now.Bond B is a zero- coupon bond paying $100…

A: The question pertains to calculation of bond price. Following formula is being used for calculation…

Q: An investor wants to find the duration of a(n) 10-year, 7% semiannual pay, noncallable bond that's…

A: Duration of bond is the weighted period of bond required to recover all cash flow from the bond and…

Q: In the following problems, assume that the coupon rate is compounded semi-annually, and bonds are…

A: Different types of the bonds have been given. Characteristics have been mapped. We have to find the…

Q: What is the fair price of a bond assuming that the annual rate is 2.42% if its face value is Php…

A: Answer: Calculation of the fair price of the bond: The fair price of the bond will equal to the…

Q: A General Power bond carries a coupon rate of 8.7%, has 9 years until maturity, and sells at a yield…

A: ParticularAmountCoupon Rate8.7%No. of years (NPER)9YTM (RATE)7.7%Face Value (FV) $    1,000.00

Q: A 6.6% semiannual pay NYC bond has exactly 12 years to maturity and is currently trading at 102.…

A: Yield to maturity is the rate of return realized on the bond when the bond is held till maturity and…

Q: Thebond shown in the following table pays interest annually.   Par value Coupon interest rate Years…

A: Bond issuers and investors both need to consider the yield to maturity. YTM is used by investors to…

Q: A bond has a semi-annual coupon payment of $16.6 .  What is the coupon RATE?  Convert to a percent.…

A: Coupon Rate: It represents the rate of interest paid to the bondholders by the issuer. Thus, it is…

Q: There is a goverment bond that pays %16 annual coupon interest however the payments are…

A: The price of the bond refers to the present value of all the future cash flows of that respective…

Q: A zero coupon bond pays no interest—only its face value of $1000 at maturity. One such bond has a…

A: A financial instrument with a fixed cost that helps a company to raise funds for business operations…

Q: Assume that interest rate on a 182-day, $1 million face value, T-Bill is currently selling at a…

A: The below expression can be used to calculate the current price of T-bill:

Q: The following table is the current term structure of interest rates based on $1,000 par value…

A: BondsYears to MaturityYield to Maturity (%)Yield to…

Q: A bond currently sells for 1,200, which gives it a yield to maturity of 8%. Suppose that if the…

A: Given information: Current price of bond is $1,200 New price of bond is $1,155 Yield to maturity is…

Q: You find a zero bond with a par value of $10,000 and 23 years to maturity. The yield to maturity on…

A: The zero-coupon bonds are the bonds under which the company needs to repay the borrowings at the…

Q: What is a discount ask yield on a bond? if the bond is priced at 1,000 and 80 days to maturity and…

A: Bonds are fixed-income assets that serve as a representation of investor loans to borrowers…

Q: Bond J has a coupon rate of 7.74 percent and 7 year to maturity. It makes semiannual payments, and…

A: The problem case focuses on calculating the % change in the price of the bond when the YTM of the…

Q: Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 7 percent, has a…

A:

Q: The 1-year spot rate is 6%, the 2-year spot rate is 7%. The Treasury plans to issue 2-year maturity…

A: Bond is a debt security that is issued by organizations to raise debt funds from public and…

Q: An investor wants to find the duration of a(n) 15-year, 6% semiannual pay, noncallable bond that's…

A: Effective duration refers to the time taken for the options to be embedded which shows the cash flow…

Q: Time to Maturity: 5 years Coupon Payment: Semi-ainual Coupon Rate: Par Value: YTM (in annual): 3.5%…

A: Macaulay’s duration measures the number of years required to cover the true cost of the bond,…

Q: Consider a 25-year bond with a face value of $1,000 that has a coupon rate of 5.9%, with semiannual…

A: A bond is a fixed income security offering a defined set of periodic payments to the investor till…

Q: A 9-year bond has a yield of 14% and a duration of 8.157 years. If the market yield changes by 85…

A: The duration of bond show how much bond is sensitive to the interest rate that means how much prices…

Q: What is the coupon rate for the bond? Assume semi-annual payments. Answer as a percent! Bond Coupon…

A: The coupon rate, also known as the nominal yield or the fixed interest rate, is the annual interest…

Q: None

A: a) Statement showing duration of bondYearInterestRepayment of principalTotalPVIF @ 14%Present…

Q: Suppose that y is the yield on a perpetual government bond that pays interest at the rate of $1 per…

A: Expected instantaneous return refers to the anticipated rate of change in the value of a financial…

Q: Calculate the bond equivalent yield and effective annual return on a negotiable CD that is 125 days…

A: Bond equivalent return:The bond equivalent yield (BEY) is a financial metric that expresses the…

Q: The term structure of interest rates has the following annual effective rates of interest for…

A: Bonds that are regular coupon-bearing and are issued at a discount to their par value and do not pay…

Q: What is the duration of a 2-year $1.000 par value bond with a 10% coupon paid semiannually and an 8%…

A: A bond is a kind of debt security issued by the government and private companies to the public for…

Q: Which $1000 bond has the higher yield to maturity: a 20-year bond selling for $800 with a current…

A: In simple words, yield to maturity on the bond refers to the internal rate of return that an…

Q: Which of the following statements is CORRECT?   a. The shorter the time to maturity, the greater the…

A: Bond Maturity is the future specific date at which the face value of the bond is repaid to the…

Q: Suppose a 10-year, $1,000 bond with an 8.4% coupon rate and semi-annual coupons is trading for a…

A: The yield to maturity is the total return an investor earned by holding the bond until its…

Q: į. What are the 0.5-year and 1-year zero rates (continuously compounding) implied from the table…

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Q: An investor wants to find the duration of a(n) 30-year, 9% semiannual pay, noncallable bond that's…

A: Par value$1,000Coupon rate9%Years to maturity30 yearsYTM14%Bond price649.02Yield changes0.5%

Q: A Rio Tinto corporate bond currently sells for $1,450, which gives it a yield to maturity of 7%. Its…

A: The duration of a bond is a measure of the change in bond prices with the change in the interest…

Q: According to the expectations theory of the term structure of interest, if the 1-year bond rate…

A: 2 Year Bond 1 year from now = (1+rate 3 )^3 / (1+rate 2)^1

Q: Calculate the bond equivalent yield and effective annual return on a negotiable CD that is 115 days…

A: A bond is a kind of debt security issued by the government and private companies to the public for…

Q: A Rio Tinto corporate bond currently sells for $1,450, which gives it a yield to maturity of 7%. Its…

A: Here, Current Price of Bond (P0) is $1,450 New Price due to change in Yield (P1) is $1,400 Change in…

Q: A bond with no expiration date has a face value of $10,000 and pays a fixed 10% interest. If the…

A: Variables in the question: Face value = $10,000Fixed Interest=10%Market price of the bond = $11,000

Q: A bond, paying semi-annual coupons of 2% per annum, matures in 8 months time. The interest rate…

A: Accrued interest= (100*2%*6/12)+(101*6.2%*2/12) Accrued interest = 1+1.04367 = 2.04367 Dirty price…

Q: What is the fair price of a bond assuming that the annual rate is 5.32% if its face value is Php…

A: Assuming i is the annual effective rate and i(4) is the effective quarterly rate. (1+i) =…

Debenture Valuation

A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.

Note Valuation

It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like: