Answered: What is the yield of a $1,000 face…

Business

Finance

What is the yield of a $1,000 face value, two year to maturity, zero-coupon bond selling for $800? 25.00%.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 12P: Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may...

See similar textbooks

Related questions

Q: 1. A 12-year bond has a 9 percent annual coupon, a yield to maturity of 8 percent, and a face value…

A: 1) Face value (F) = P 1000 r = YTM = 8% n = 12 years Coupon (C) = 9% of 1000 = P 90

Q: A $3600, 6.9% bond with semi-annual coupons redeemable at par in 5 years was purchased at 100.1.…

A: Par value (F) = $3600 Coupon rate = 6.9% Annual coupon amount (C) = 3600*0.069 = $248.40 Years to…

Q: Bond 1 matures in two years and pays an annual coupon (at the end of the year) of 1%. The face value…

A: YTM With face value (FV), present value/ price (PV), period (n) and coupon payment (C), YTM is…

Q: A Company’s Bond is with current yield of 8% and will mature in 8 years. The market price of the…

A: Current Yield = Coupon Amount / Market price

Q: What must be the price of a $2,000 bond with a 5.8% coupon rate, annual coupons, and 30 years to…

A: A financial instrument that does not affect the ownership of the common shareholders or management…

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: What is the current price of a 9%, GHS1,000 annual coupon bond that has eighteen years to maturity…

A: Given Data: Coupon Rate = 9% YTM (r) = 9.631% Face value = GHS 1000 Years to maturity(n) = 18

Q: What must be the price of a $2,000 bond with a 5.8% coupon rate, annual coupons, and 30 years to…

A: Price of the bond is the present value of future cashflows

Q: A bond OMR 100 face value, 10 years to maturity, 4% annual coupon rate, and a annual required rate…

A: Bonds are issued in order to raise funds to finance the operations of the company.

Q: Compute the yield to maturity for a zero coupon bond with a maturity of 9 years and a face value of…

A: To calculate the yield to maturity of the zero coupon bond we will use the below equation Yield to…

Q: What is the expected rate of return on a bond that pays a coupon rate of 9%, has a par value of…

A: expected rate of return on a bond that pays a coupon rate of 9%, has a par value of P1,000, matures…

Q: 1. (a) Suppose a 6 percent coupon, $1,000 bond with ten years left to maturity is selling for…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What is the yield to maturity on a $1,000 par value 6⅞ percent Hilton Corporation bond if the…

A: Yield to maturity is the internal rate of return earned by an investor who bought the bond today at…

Q: 30.00 A coupon bond pays this amount every 6 months; for the number of payments/year; 2 2$ The bond…

A: The present value (PV) of a bond represents the sum of all the future cash flow from that contract…

Q: Sony Company has a Bond with current yield 10%, will mature in 15 years. What is the yield to…

A: Current Yield is calculated as follows: Current Yield = Annual Coupon payment/ Current Market price…

Q: What must be the price of a $1,000 bond with a 6.5% coupon rate, annual coupons, and 20 years to…

A: Bond price is the sum of present value of all coupon payments and present value of face value. Bond…

Q: What is the current price of a 9%, $1,000 annual coupon bond that has eighteen years to maturity and…

A: In the given question we need to compute the current price of bond i.e. present value of the bond.

Q: Consider a 24-year, 8.1% coupon rate, $1,000 face value bond that pays quarterly coupons. How much…

A: Face Value…

Q: Calculate the current market price of a 15%, $1,000 semi-annual coupon bond with 20 years to…

A: Price of bond is sum of present value coupon payment plus present value of par value of bond.

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

A: The yield to maturity (YTM) of a bond is the cumulative return required if the bond is held until…

Q: One-year Treasury securities yield 6.9 percent, while 2-year Treasury securities yield 7.2 percent.…

A: Nothing says "safety of principal" like Treasury securities when it comes to conservative…

Q: Two-year Treasury securities yield 6.7 percent, while 1-year Treasury securities yield 6.3 percent.…

A: The long-term interest rate, according to the expectations theory of the term structure, is a…

Q: Q1. (a) Suppose a 6 percent coupon, $1,000 bond with ten years left to maturity is selling for…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Yield to matunty. a. What is the yield of the following bond if interest (coupon) is paid quarterly?…

A: Question asked here is Yield to maturity of $ 5000 bond paying 8% coupon quarterly for 20 years and…

Q: What is the coupon rate of a two-year, $5,000 bond with semiannual coupons and a price of $4,767.59,…

A: Face value of the bond = $5,000 Current price of the bond (P0) = $4,767.59 Yield to maturity = 0.069…

Q: Calculate P

A: Present value is the current worth of future payments at given rate of return.

Q: Calculate P

A: The price of the bond is the amount that an investor is ready to pay and the seller is ready to take…

Q: Assuming semiannual compundingwith 15 years to maturity paying 1,000.00 at maturity for YTM of 7%,…

A: Bonds are the financial debt instruments which are issued by the financial institution to raise…

Q: J&J Manufacturing just issued a bond with a OMR1,000 face value and a coupon rate of 8%. If the bond…

A: Bonds are the financial instruments that are issued by the borrower to raise funds for which fixed…

Q: Consider a 24-year, 8.1% coupon rate, $1,000 face value bond that pays quarterly coupons. How much…

A: Present value of the quarterly coupons and face value at quarterly yield to maturity (YTM) rate is…

Q: What is the value of a $1,000 par value zero-coupon bond maturing in 10 years to an investor…

A: RETURN RATE 7% YEARS 10 PMT (MONTHLY DEPOSIT) 0 FACE VALUE (FV) $1,000

Q: Firm A’s bond coupon rate = 10.20%, a yield to maturity = 10.55%, market price = $850. The annual…

A: the question is based on calculation of annual coupon payment in bond investment. The market price…

Q: What is the yield-to-maturity of a $1,000 face value, 12% coupon bond selling for $1,241.82 that has…

A: Face Value = $1000 Coupon amount = $1000*12% = $120 Selling Price = $1241.82 Years = 12 Therefore…

Q: If yield to maturity decrease instantly by a percentage point (100 basis points), what shall the…

A: Please find the answer to the above question below:

Q: What price is paid for a P2000 par value 10-year bond with 8.4% coupons paid semiannually that is…

A: To calculate the bond price we will use the below formula Bond price =…

Q: 15

A: Given that;Face value of the bond is $5000Present value of the bond is $4304.48Yield to maturity is…

Q: An analyst observes a 5-year, 10% coupon bond with quarterly payments. The face value is £1,000. How…

A: Bond pays coupon payment on quarterly basis. Means, bond pays quarterly coupon payments. Coupon is…

Q: Consider a corporate bond with 10 years until maturity, trading at par (M=100,000), with semi-annual…

A: A bond is a debt instrument that is issued by the organization to raise the funds from the investor…

Q: -year bond with semi-annual coupons is purchased to yield j2 = 8%. The absolute value of the…

A: The coupon rate is equal to the yield to maturity if the bond's acquisition price is equal to its…

Q: Par Value Coupon Rate Years to Maturity Yield to Maturity Price 1,000.00 8% 15 900.00 5,000.00 10%…

A: Yield to maturity refers to the internal rate of return which is earned by the investor who makes…

Q: $1000 par value bond with 32 years to maturity has an 8.2% coupon rate with semi-annual interest…

A: Value of bond is the present value of the future coupon payments and the present value of the bond…

Q: A 2-year zero-coupon bond with $100 principal is trading at $95.00. Price of a 2-year coupon bond…

A: In this given question we, need to calculate the spot rate for a Zero coupon bond and the spot rate…

Q: A. At 1000 par calculate the price of a 10 year semiannual coupon bond with a 4% coupon and an…

A: There are 2 question

Q: (C) Calculate the yield-to-maturity (YTM) and current yield for each of the bonds below. Coupon rate…

A: YTM or the yield to maturity is the the return earned when the bond is held to maturity. It can be…

Question

ASAPP

What is the yield of a $1,000 face value, two year to maturity, zero-coupon bond selling for $800?

25.00%.

11,80%

20.00%

10.80%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may be called in 4 years at a call price of 1,060. The bond sells for 1,100. (Assume that the bond has just been issued.) a. What is the bonds yield to maturity? b. What is the bonds current yield? c. What is the bonds capital gain or loss yield? d. What is the bonds yield to call?
What is the yield to maturity of a one-year, risk-free, zero-coupon bond with a $5,000 face value and a price of $4,550 when released? ..... A. 9.89% B. 4.945% OC. 0.018% D. 9%
point(s) possib What is the coupon rate of a nine-year, $10,000 bond with semiannual coupons and a price of $7,863.50, if it has a yield to maturity of 7.8%? A. 6.233% OB. 5.342% OC. 3.562% D. 4.452% View
What is the yield to maturity of a one-year, risk-free, zero-coupon bond with a $5,000 face value and a price of $4,650 when released? OA. 3.763% OB. 7.527% OC. 0.019% OD. 7%
What is the coupon rate of a ten-year, $10,000 bond with semiannual coupons and a price of $9,558.57, if it has a yield to maturity of 6.6%? OA. 7.188% OB. 5.99% OC. 4.792% OD. 8.386%
What is the price of a zero coupon bond with a $1,000 face value, 10-year maturity, and annual compounding? The market rate on similar bonds is 8%. a. $ 463.193 b. $ 655.228 c. $934.516 d. $ 1000 I
F What must be the price of a $2,000 bond with a 5.9% coupon rate, annual coupons, and 25 years to maturity if YTM is 10.2% APR? A. $984.98 B. $1,231.23 OC. $1,723.72 D. $1,477 47 CODE
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 A
Yield to maturities on zero coupon T-bill Year YTm -3.100 3.300 る20。 3.100 3.02. what is the Cost of a 1000 par Zyears, y annual Coupon paying bond? use 5 decimal places 290t 1て345
What is the price of a zero coupon bond with $1,000 face value, 8 years to maturity and an annual yield of 3.7%? O $822.88 O $747.77 O $813.96 O $739.67
Q24 A bond OMR 100 face value, 10 years to maturity, 4% annual coupon rate, and a annual required rate of return of 8%. What is the coupon payment amount of the Bond; assume that coupons are compounded monthly? a. OMR 2.000 b. OMR 1.000 c. OMR 0.333 d. OMR 4.000
What must be the price of a $5,000 bond with a 7% coupon rate, semiannual coupons, and eight years to maturity if it has a yield to maturity of 11% APR? OA. $3,954 OB. $4,745 OC. $3,163 OD. $5,535 H Search (XI)