Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question
What is the value today of a zero-coupon bond with par value of $1,000 maturing in 12 years if the market rate of interest (yield to maturity) is 14%?
Group of answer choices
$792.44
$207.56
$1,000.00
$500.00
$700.00
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- What is the bond market price with a face value of $1,000 at yield to maturity of 9% for 10 years with a coupon rate of 8%? 0 $835.82 o $935.82 o $422.40 o $513.42 O none Aarrow_forwarddo not use image only typing answer fully calculation.arrow_forwardklp.3 What must be the price of a face-value $2,000 bond with a 6.4% coupon rate, annual coupons, and 20 years to maturity if YTM is 8.2% APRarrow_forward
- 1. The rate of return on a 10 percent coupon bond that is initially purchased at par for $1,000 and sells for $1,100 the next year is ___% 2. The current interest rate on a 10-year coupon bond (with face value = $1,000 and annual coupon rate = 3.25%) is 2.42%. This implies: (there are more than one answer) Question 14 options: the price of this bond is $1,000. the price of this bond is greater than $1,000. the price of this bond is less than $1,000. the buyer of the bond will have a return of 2.42% if she sells the bond next year. the buyer of this bond will receive $32.5 from the bond issuer every year before maturity while holding the bond. 3. True or False? Last year you purchased a bond with an interest rate of 5%. Now the interest rate on the bond market drops to 4%. Then the face value of your bond is lower.arrow_forwardQUESTION 15 Suppose that all investors expect that the interest rates for the 4 years will be as follows. What is the price of a 3-year zero coupon bond with par-$1,000? Year 1-Year Forward rate 4.6% 2 4.9% 3 5.2% 4 5.5% O a. $1,000.00 Ob. $866.32 Oc. $858.92 Od. $821.15arrow_forwardMaturity (years) 1 2 3 4 5Zero-coupon YTM 4.6% 5.0% 5.4% 5.8% 6.1% What is the price today of two-year, default-free security with a face value of $1000 and an annual coupon rate of 6%? Does this bond trade at a discount, at par, or at a premium?arrow_forward
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