You buy a 20-year bond with a coupon rate of 10.0% that has a yield to maturity of (Assume a face value of $1,000 and semiannual coupon payments.) Six months lat the yield to maturity is 12.0%. What is your return over the 6 months? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus > Answer is complete but not entirely correct.

You buy a 20-year bond with a coupon rate of 10.0% that has a yield to maturity of (Assume a face value of $1,000 and semiannual coupon payments.) Six months lat the yield to maturity is 12.0%. What is your return over the 6 months? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus > Answer is complete but not entirely correct.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

You buy a 20-year bond with a coupon rate of 9.2% that has a yield to maturity of 10.7%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 11.7%. What is your return over the 6 months? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.
You buy a 20-year bond with a coupon rate of 9.2 % that has a yield to maturity of 10.2%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 11.2%. What is your return over the 6 months? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign. > Answer is complete but not entirely correct. Rate of return (2.15) %
Suppose that you buy a two-year 7.3% bond at its face value. a-1. What will be your total nominal return over the two years if inflation is 2.3% in the first year and 4.3% in the second? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Nominal return a-2. What will be your real return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Real return % % Real return Nominal return b. Now suppose that the bond is a TIPS. What will be your total 2-year real and nominal returns? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) 1%
You buy a 20-year bond with a coupon rate of 8% that has a yield to maturity of 9%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 10%. What is your return over the 6 months? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.)
Suppose that you buy a 1-year maturity bond with a coupon of 7% paid annually. If you buy the bond at its face value, what real rate of return will you earn if the inflation rate is 4%? 6%? 8%? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.)
Suppose that you buy a TIPS (inflation-indexed) bond with a 1-year maturity and a coupon of 2% paid annually. Assume you buy the bond at its face value of $1,000, and the inflation rate is 10%. a. What will be your cash flow at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What will be your real return? c. What will be your nominal return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
You purchase a bond with a coupon rate of 6.8 percent, a par value $1,000, and a clean price of $910. Assume a par value of $1,000. If the next semiannual coupon payment is due in two months, what is the invoice price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
You purchase a bond with a coupon rate of 5.2 percent, a par value $1,000, and a clean price of $930. Assume a par value of $1,000. If the next semiannual coupon payment is due in two months, what is the invoice price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Invoice price
You buy a 20-year bond with a coupon rate of 9.6% that has a yield to maturity of 10,5% (Assume a face value of $1,000 and semiannual coupon payments) Six months later, the yield to maturity is 11,5%. What is your return over the 6 months? Note: Do not round mediate calculations. Enter your answer as a percent rounded to 2 decimal places, Negative amount should be indicated by a minus sign.
You purchase a bond with a coupon rate of 9.1 percent, a par value of $1,000, semiannual coupons, and a clean price of $835. If the next coupon payment is due in two months, what is the invoice price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
You buy a bond for $991 that has a coupon rate of 5.90% and a maturity of 10-years. A year later, the bond price is $1,176. (Assume a face value of $1,000 and annual coupon payments.) What is the new yield to maturity on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. What is your rate of return over the year? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
Calculate the price of a 6.4 percent coupon bond with 15 years left to maturity and a market interest rate of 7.0 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations and round your final answer to 2 decimal places.)

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS