What is the cash flow of a 6% coupon bond that pays interest annually, matures in 9 years, and was originally priced at par value.of $1,000? b. Assuming a current market yield of 5%, what is the price of this bond? B2-Assuming a current market yield of 8.5%, what is the price of the bond? B3-Assuming a market yield of 1.5%, what is the price of the bond?
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Answer the following: B1- What is the cash flow of a 6% coupon bond that pays interest annually, matures in 9 years, and was originally priced at par value.of $1,000? b. Assuming a current market yield of 5%, what is the price of this bond? B2-Assuming a current market yield of 8.5%, what is the price of the bond? B3-Assuming a market yield of 1.5%, what is the price of the bond?
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- What is the market price of a redeemable (at par) bond, with a maturity date in 4 years’ time, and a coupon rate of 10%, if current cost of debt, Kd (return required or yield) is 8%?Consider a bond that has a price of $1046.76, a coupon rate of 8.8%, a yield to maturity of 8.1%, a face value of $1000, and 10 years to maturity. What is the current yield? Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your response below. Enter your answer to 2 DECIMAL PLACES. Number %Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000. Maturity (Years) 1 2 3 4 5 Price $983.78 865.89 797.92 732.00 660.24 Required: a. Calculate the forward rate of interest for each year. b. How could you construct a 1-year forward loan beginning in year 3? c. How could you construct a 1-year forward loan beginning in year 4?
- Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000. Maturity (Years) 1 2 3 4 5 Show Transcribed Text B) How could you construct a 1-year forward loan beginning in year 3? (Face Value) C) How could you construct a 1-year forward loan beginning in year 4? (Face Value) Required A Required B Complete this question by entering your answers in the tabs below. Face value Rate of synthetic loan → Show Transcribed Text Price $ 970.93 898.39 836.92 How could you construct a 1-year forward loan beginning in year 3? Note: Round your Rate of synthetic loan answer to 2 decimal places. Required A 776.20 685.42 Required B Face value Rate of synthetic loan Required C 7.85 % Required C How could you construct a 1-year forward loan beginning in year 4? Note: Round your Rate of synthetic loan answer to 2 decimal places. Ċ 13.29 %Q1. (a) Suppose a 6 percent coupon, $1,000 bond with ten years left to maturity is selling for $1,100.What is the yield, assuming that interest is paid quarterly? (b) Assume that the bond in (a) above pays interest semi-annually. What would the bond sell for, given that the investor/market wants to earn the same yield as calculated in (a)? c) Assume that the bond in (a) above pays interest monthly. What would the bond sell for, given that the investor/market wants to earn the same effective yield as calculated in (a)? Q2. A firm has just issued (January 1, 2019) a bond that has a face value of $1,000, a coupon rate of 6 percent paid semi-annually (June 30, December 31), and matures in 8 years. The bonds were issued with a yield to maturity of 7%. What price were the bonds issued at? Assume that on July 1, 2021, the bond trades to earn an effective yield of 10%. At what price should this bond be trading for on July 1, 2021? PRICE WHEN ISSUED: PRICE ON JULY 1, 2021: Q3. (a) (a) You are…Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000. Maturity (Years) 1 2 3 4 5 Required: a. Calculate the forward rate of interest for each year. b. How could you construct a 1-year forward loan beginning in year 3? c. How could you construct a 1-year forward loan beginning in year 4? Required A Price $940.93 Complete this question by entering your answers in the tabs below. 868.39 800.92 735.40 670.48 Required B Maturity (years) 2 3 Calculate the forward rate of interest for each year. Note: Round your answers to 2 decimal places. Required C Forward Rate % % Prov 12 of 12 Next
- What are the cash flows you receive from a $1,000 coupon bond with a 6% coupon rate and: a) semiannual coupon payments; b) annual coupon payments; Calculate the price of the bond if its yield to maturity is 3%. Calculate the price of the bond if its yield to maturity increases to 5%. Compare your answers and explain why the prices are different. Is the bond trade at discount, par, or premium in each case?Consider a 25-year bond with a face value of $1,000 that has a coupon rate of 5.8%, 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.)Give typing answer with explanation and conclusion A bond offers a coupon rate of 5%, paid annually, and has a maturity of 6 years. The current market yield is 12%. Face value is $1,000. If market conditions remain unchanged, what should be the Capital Gains Yield of the bond?
- Suppose a ten-year, $1,000 bond with an 8.3% coupon rate and semiannual coupons is trading for $1,034.54. a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? b. If the bond's yield to maturity changes to 9.2% APR, what will be the bond's price? a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? The bond's yield to maturity is %. (Round to two decimal places.)2. Consider a bond with a 7.5% annual coupon rate and a face value of $1,000. Calculate the bond price and duration & show your work. Years to Maturity Interest rate Bond Price Duration 4 6. 6. 9. What relationship do you observe between yield to maturity and the current market value? What is the relationship between YTM and duration?Suppose a 10-year, $1,000 bond with an 8.6% coupon rate and semi-annual coupons is trading for a price of $1,035.22. a. What is the bond's yield to maturity (expressed as an APR with semi-annual compounding)? b. If the bond's yield to maturity changes to 9.3% APR, what will the bond's price be? **** a. What is the bond's yield to maturity (expressed as an APR with semi-annual compounding)? The bond's yield to maturity is%. (Round to two decimal places.)