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?
Bonds, bond price, hedging using T-bond futures,hedging using forward contract, duration, change in price of bonds. ... What is the current price of the bond? ...
... c) Explain the relationship between the number of years until a bond matures and its price. The Nickelodeon Manufacturing Co. ... Answer: Price of bond= $923.87. ...
Relationship Between Bond Prices and Bond Yields. ... What does that tell you about the relationship between bond prices and bond yields? See the attached file. ...
Current bond price, YTM, coupon rate, real rate of interest. Staind, Inc. ... If the YTM on these bonds is 8.75 percent, what is the current bond price? ...
Calculate: Bond Price. ... This solution illustrates how to calculate bond price for different yields to maturity. All calculations are included. Posting ID: 129886:
... Present Value Interest Factor PVIFA= Present Value Interest Factor for an Annuity Price of bond= PVIF * Redemption value + PVIFA * interest payment per period. ...
... b. At what price does the bond sell? (Assume annual interest payments.) c. What will happen to the bond price if the yield to maturity falls to 6 percent? ...
