Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- How can I calculate the following using excel? (see screenshot)arrow_forward, a. Find the duration of a 7% coupon bond making annual coupon payments if it has three years until maturity and a yield to maturity of 7.6%. (Do not round intermediate calculations. Round your answers to 4 decimal places.) b. What is the duration if the yield to maturity is 11.6%? (Do not round intermediate calculations. Round your answers to 4 decimal places.) 7.6% YTM __ Years 11.6% YTM __ Yearsarrow_forwardSuppose that all bonds have $1,000 of face value. The current prices of zero coupon bonds are as follows: $960 for a one-year bond; $910 for a two-year bond; $850 for a three-year bond. a. What is the price of a three-year bond with 8% annual coupon payment? b. What is the YTM of the two-year zero coupon bond? c. Consider the following two-year bonds: (i) a zero coupon bond as above; (ii) a bond with 6% annual coupon payment. Whose YTM is higher?arrow_forward
- If the YTM on a bond is 17.5 %, what will be the periodic rate assuming the bond is paying coupons semi-annually? (Write this number as a decimal and not as a percentage, e.g. 0.11 not 11%. Round your answer to three decimal places. For example 1.23450 or 1.23463 will be rounded to 1.235 while 1.23448 will be rounded to 1.234).arrow_forward12. Suppose that you buy a 1-year maturity bond for $1,000 which is a real return bond with a coupon rate of 4%. What will the cash flow provided by the bond be for each of the four inflation rates? What will be the real and nominal rates of return on the bond in each scenario? (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. The inflation rate is 2%. b. The inflation rate is 4%.arrow_forwardAssume all bonds have par or face value of 1,000arrow_forward
- What is the bond equivalent yield on a $1 million T-bill that currently sells at 96.9 percent of its face value and is 344 days from maturity? (Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))arrow_forwardBoth Bond A and Bond B have 9.8 percent coupons and are priced at par value. Bond A has 9 years to maturity, while Bond B has 20 years to maturity. a. If interest rates suddenly rise by 2.4 percent, what is the percentage change in price of Bond A and Bond B? Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Bond A Bond B %A in Price % % b. If interest rates suddenly fall by 2.4 percent instead, what would be the percentage change in price of Bond A and Bond B? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. %A in Price Bond A %arrow_forward3. The following is a list of prices for zero-coupon bonds with different maturities and par value of $1,000. Suppose the interest rate is compounded once per year. Maturity (Years) Price ($) 970 960 910 870 1 2 3 4 Answer the following questions: (a) What is, according to the expectations theory, the one-year interest rate in the second year? (b) What is, according to the expectations theory, the one-year interest rate in the third year? (c) What is, according to the expectations theory, the one-year interest rate in the forth year?arrow_forward
- Suppose a zero coupon bond with a $100 face value due in 3 years from today is trading today for $83. How much is the YTM (yield to maturity) of this Zero-coupon bond?Enter your answer in the following format: 0.1234Hint: Answer is between 0.0577 and 0.0692arrow_forwardLooking at the Treasury yield curve you see that the two-year Treasury bond is selling at an interest rate of 3.84 percent and the three-year Treasury bond sells at a rate of 3.97 percent. What is the implied one-year interest rate two years from now? (Enter the answer as a percentage accurate to two decimal places. Just enter a number - do not add a % symbol or any other punctuation.)arrow_forwardWhat is the market price of a $1,000, 5 percent bond paying a semiannual coupon if comparable market interest rates rise to 12 percent and the bond matures in 14 years? Round your answer to the nearest dollar. (Hint: Use Appendix A-2 and Appendix A-4.) Round 'Present value of a Single Amount' and 'Present value of a Series of Equal Amounts' in intermediate calculations to four decimal places.arrow_forward
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