An investor purchases a $1,000 par value bond that pays $60 interest each six-month period and has 8 years to maturity. The investor plans to hold the bond for 5 years and sell it in the market. The current required rate of return in the market is 14%, but is expected to drop to just 10% at the time of the sale due to projected falling interest rates. The price the investor is willing to pay for this bind is what?
If you looked at the bond trading pages online or in the newspaper and saw a bondprice quote for a $1,000 par value bond of "96.500" you would know the actual dollar price of the bond was:
Assume coupons are paid annually. Here are the prices of three bonds with 10-year maturities:
Bond Coupon (%) Price (%)
2 81.62
4 98.39
8 133.42
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a. What is the yield to maturity fo
A corporation has a $1,000 par value bond outstanding that was issued for 30 years 5 years ago at a coupon rate of 15%. The yield on similar bonds is now 12%. What is the price and what is it yielding if it is selling for $938.81?
You are considering purchasing a bond at the end of this year. The bond has a coupon rate of 10.5 percent, interest payments are made annually and the bond matures in 20 years. If your required pretax rate of return is 14 percent, what is the maximum price you would be willing to pay for a 20-year, 10.5 percent bond? Assume t
3. You own 2 bonds, A & B. Each bond matures in 4 years, has a par value of $1000, and YTM of 10%. Bond A pays an 8% annual coupon; bond B is a zero coupon bond. Assume the market rate for these bonds stays at 10% over the next 4 years.
A. Use PV tables to calculate the price of each bond at the following time periods (comple
J& J just issued a bond with a $1,000 face value and a coupon rate of 7%. If the bond has a life of 30 years, pays annual coupons and the yield to maturity (YTM) is 6.8%, what will be the bond sell for?
Duration of a coupon paying bond is:
Equal to its number of payments.
Less than a zero coupon bond.
Equal to the zero coupon bond.
Equal to its maturity.
None of the above.
Have 2 bonds x and y (both make annual payments)
bond x is a premium bond , pays a 10% coupon, has a ytm of 5 % and 17 years to maturity.
bond y is a discount bond, pays a 5% coupon, has a ytm of 10% and 17 years to maturity.
i have to find out the value of the bonds 6 and 10 years from now :(if interest rates remain unchan
