You are considering buying a bond that pay 20 semi-annual coupons of S 50 over the remaining maturity period. If the bond has the par value of $ 1,000 and you require 11% yield, what would be the price you would wan to pay for the bond?
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- Consider a bond with a face value of $2,000 that pays a coupon of $150 for 10 years. Suppose the bond is purchased at $500, and can be resold next year for $400. What is the rate of return of the bond? What is the yield to maturity of the bond?You are considering the purchase of a 20-year bond with an annual coupon rate of 9.5%. The bond has a face value of $1,000. You require a 12% nominal yield to maturity on this investment. If the bond makes annual interest payments, what is the maximum price you should be willing to pay for the bond? If the bond makes semiannual interest payments, what is the maximum price you should be willing to pay for the bond?Assume that you are considering the purchase of a 30-year, noncallable bond with an annual coupon rate of 13.0%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 9.0% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond? You are not required to show calculations. However to receive credit you must provide the inputs used (N, PMT, FV, I/Y, PV) to solve. If you utilize a template, you can copy and paste the section used in the submission. $699.34 $1,000.00 $1,412.76
- You are considering the purchase of a 25-year bond with a coupon rate of 11.5 percent. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require a 6.45 percent yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?Suppose you purchase a $1,000 bond with a coupon rate of 8% matures in 5 years at par, and you plan to sell it at the end of 3 years at the prevailing market price. When you purchase the bond, your investment advisor predicts that similar bonds with 2 years to maturity yield at 6%. What is the expected yield to maturity on the bond?Assume that you wish to purchase a bond with a 17-year maturity, an annual coupon rate of 11.5%, a face value of $1,000, and semiannual interest payments. If you require a 9.5% return on this investment, what is the maximum price you should be willing to pay for the bond?
- You are considering buying a semi-annual bond that has 24 coupon payments remaining, with the next coupon payment occurring 8 days from the settlement date. The bond's coupon rate is 6.6% and similar bonds are reported to have a yield of maturity of 5.7% There are 182 days between the bond's coupon payments. a) What is the maximum price that you are willing to pay for the bond? b) If your assumptions are correct then what is the estimated quoted price (remember quotes are a percent of par value)? Note:- Don't use ExcelYou are considering the purchase of a 20-year, noncallable bond with a coupon rate of 8.0%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 12% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?Consider a bond that promises to pay (a coupon) $100 one year from now, (a coupon) $100 two years from now, (a coupon) $100 three years from now, and (the principal) $3,000 three years from now. Let's say the market interest rate is 4.5% per year. Assume the bond is risk-free. If the bond is offered for $2,800, should you buy the bond at this price? Explain why or why not. a. b. What would be the bond price in market equilibrium?
- Assume that you are considering the purchase of a 30-year, noncallable bond with an annual coupon rate of 9.0%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 9.0% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?suppose you purchase a 30-year Treasury bond with a 5% annual coupon, initially trading at par. In 10 years' time, the bond's yield to maturity has risen to 6% (EAR). (Assume $100 face value bond.) a. If you sell the bond now, what internal rate of return will you have earned on your investment in the bond? b. If instead you hold the bond to maturity, what internal rate of return will you earn on your initial investment in the bond? c. Is comparing the IRRs in (a) versus (b) a useful way to evaluate the decision to sell the bond? Explain. 1. If you sell the bond now, what internal rate of return will you have earned on your investment in the bond? The IRR of the bond is nothing%. (Round to two decimal places.)You, as an investor, wish to purchase a 20-year bond with a maturity value of $1,000 and semiannual coupon payments of $40. If you, as an investor, require a 10 percent yield to maturity on this investment, what is the maximum price you will be willing to pay for this bond? b. From the computation, is this bond selling at par, discount, or premium?