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Young Corporation has bonds on the market with 19 years to maturity, a YTM of 6.4 percent, and a current price of $1,519. The bonds make semiannual payments. The coupon rate on these bonds must be percent. (Input answer as a percent rounded to 2 decimal places, without the percent sign.)
Using Bond Quotes
Suppose the following bond quote for IOU Corporation appears in the financial page of today's newspaper. Assume the bond has a face value of $1,000, and the current date is April 15, 2008. (Input answers as percents rounded to 2 decimal places, without the percent sign.)
Company (Ticker) Coupon Maturity Last Price Last Yield EST Vol (000s)
IOU (IOU) 7.425 Apr 15, 2016 873.1 ?? 1,827
The yield to maturity of the bond is percent.
The current yield is percent.
Nominal and Real Returns
An investment offers a 14.5 percent total return over the coming year. Bill Bernanke thinks the total real return on this investment will be only 5.5 percent. Therefore, Bill believes the inflation rate will be percent over the next year. (Input answer as a percent rounded to 2 decimal places, without the percent sign.)
You purchase a bond with an invoice price of $1,070. The bond has a coupon rate of 4.6 percent, semiannual coupons and there are 2 months to the next coupon date. The clean price of the bond is $ . (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
In the table, find the Treasury bond that matures in May 2029. Assume that it is currently May 2008. What is the yield to maturity for this bond? (Input answer as a percent rounded to 2 decimal places, without the percent sign.)
Rate Maturity Mo/Yr Bid Asked Chg Ask Yld
?? May 15 106:13 106:17 +2 4.96
8.875 May 29 123:19 123:22 +4 ??
5.375 May 33 ?? ?? +3 6.48
The yield to maturity is percent.© BrainMass Inc. brainmass.com October 25, 2018, 1:57 am ad1c9bdddf
The solution explains the calculation of bond coupon rate, yield, YTM, accrued interest and treasury bond yield
Bond Questions - On September 20, 1996, you bought $60,000 face value of 9% semiannual US Treasury Bonds due on May 15, 2009 at 106% of par.
Assume today is May 16, 2003. On September 20, 1996, you bought $60,000 face value of 9% semiannual US Treasury Bonds due on May 15, 2009 at 106% of par. The bond was originally issued with a 25 year maturity in 1984. How much accrued interest did you pay when you bought the bond? If the market demands 4% for 6 - year Treasuries today, how much should your bond be worth today?
If you sold the bond today, how much of a capital gain or loss (if any) would you expect to see on your original investment?
A second semi-annual bond, issued by General Motion, Inc matures in 15 years, has a 6% coupon, and sells at 92% of par. A third bond issued by the City of Portland, is selling at par, has a 4% coupon and matures in 3 years. What are the current yield and yield to maturity for these two bonds?
Your top marginal tax rates are 35% federally and 8% for the State of Maine. Which bond offers the best return currently, after taxes are considered? What other factors should go into your consideration?
Using financial Management theory, predict what you believe will happen to term structure and risk structure of interest rates over the coming year.View Full Posting Details