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# Bonds

### Unique Bonds International Finance

Create an idea of an unusual bond and analyze its features.

### fully hedged return

You are a fixed income fund manager based in UK. A Hungarian government bond paying annual 8.5% coupon with one year remaining life is trading at 99.55. Spot rate of HUF/GBP is 350.72, one year forward HUF/GBP is 356.35. Calculate the fully hedged return if you invest in this bond.

### Bond Calcuations and Current Yield

A 3yr bond, annual coupon 3.5%, yield 3.8%, last coupon payment just made. Calculate its price and current yield?

### Real basic money question

Do any of the following qualify as items of money, or preform any of the functions of money (medium of exchange, unit of account, or store value) partially or completely? - Antique clock - Plastic sheets used to make Visa cards - Coins in the Fed museum - Government bonds

### Bonds..max price

Assume you wish to purchase a 25-year semiannual bond that has a maturity value of \$1,000. the coupon rate is 8%. if you require a 10% yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?

### Calculation of the Bond Value

This should be an easy one, for those with financial calculators. PLEASE POST ANSWERS AND MANUAL CALCULATIONS/FORMULAS for all 3 parts. Smith Industries has a \$1,000 par value bond with an 8 percent coupon interest rate outstanding. The bond has 12 years remaining to maturity date. If interest is paid annually, what is the

### The Fed and its influence on long-term interest rates

In late June the Fed lowered its federal funds rate target from 1.25% to 1%. However between mid June and early August the yield on longer term 10 year Treasury notes rose from 3.1% to over 4.3%. This shows that Federal Reserve activity is irrelevant to the behavior of long term interest rates" Agree or Disagree with the u

### Private activitiy bonds restriction by the state

Part 1. Does restricting "private-activity" bonds, the solution set forth by the Federal tax reform act of 1986, make sense if applied by the state on local governments? What are the arguments for state restriction of these bonds? Part 2. Do the arguments for restricting these private activity bonds by the state on local gov

### State Restrictions Tax and Exemption of Local Governments

Part 1 - What are the effects of States restricting tax-exemptions on local governments? Why is this done?What is the argument for this? Part 2 - What are the specific effects of restriction of tax-exempt bonds by state's on local governments when the local government has high debt and the state government has low debt?

### Important information about Bond Pricing

A General Motors bond carries a coupon rate of 8 percent, has 9 years until maturity, and sells at a yield to maturity of 7 percent a) What interest payments do bondholders receive each year? b) At what price does the bond sell? (Assume annual interest payments.) c) What will happen to the bond price if the yield to maturit

### Bond Yields- Current Yield and Yield to Maturity

An AT&T bond has 10 years until maturity, a coupon rate of 8 percent, and sells for \$1,100. (Assume annual payments.) a) What is the current yield on the bond? b) What is the yield to maturity? Please include with your response the formulas required for this problems, as well as the detailed explanation for how to solve the

### Bond Values and Stock Prices

Part a Assume you hold a corporate bond with a \$1,000 par value paying a 7 &#8541; coupon rate that has two years left until maturity. Calculate the value of the bond if the current market interest rate on a bond of this risk is 9 %. Part b Assume that you hold a share of common stock that will pay a dividend of \$5.00

### Economics: Fed and Money Supply

Suppose the money supply is currently \$500 billion and the Fed wishes to increase it by \$100 billion. a. Given a required reserve ratio of 0.25, what should it do? b. If it decided to change the money supply by changing the required reserve ratio, what change should it make?

### US treasury

Suppose that as a result of a recession consumer expectations of annual inflation declined from 2% to 1.5% and, at the same time, the expected real rate of return required to equate investor demand to the existing supply of default risk- free Treasury bonds declined from 3% to 1%. What would you expect to happen to the nominal

### Determining equilibrium interest rate

IS/LM Homework The economy of Econoville consists of two markets as follows: Product Market C = 2.0 + 0.70 Yd I = 3.0 + 0.12 Y - 0.20(r) % Yd = Y - T Y = C + I + G G = 12 T = 10 Money Market MS = 12.0 MD = 4.0 + 0.20Y - 0.4(r) % MD = MS Part a Derive the IS curve for Econoville Part b Derive

### Municipal bond rating services - value of and criticisms

What are the main criticisms that have been levelled against municipal bond rating services? What are the advantages and disadvnatages of replacing the present services with one done by a Federal agency?

### Municipal bond ratings and rating services: How are the services of value to issuers? to underwriters and dealers? to investors?

Municipal bond ratings and rating services have been severely criticized from time to time, yet they survive and prosper. Therefore, they must be useful. How are the services of value to issuers? to underwriters and dealers? to investors?

### Tax Exempt Securities

Who are the principal owners of tax-exempt securities? How has this changed over time? What are the main factors in the decisions of the different types of owners about increasing or reducing their holdings of tax-exempt securities?

### Negotiated basis vs competing bid

Some of the empirical research suggests that the net interest cost to issuers is likely to be somewhat higher when a new issue is sold on a negotiated basis (the negotiations being with a single team of underwriters) than on the basis of competing bids from a number of underwriting syndicates. If this is often true, under what c

### Describe refunding and municipal bonds/tax exempt bonds

The single most important reason for the large volume of new issues of tax-exempt bonds during the 1990s has been the refunding of outstanding bonds. What facts does an issuer need and which variables must the issuer (or its financial advisor) forecast, in order to decide whether a proposed refunding is the right course of actio

### Tax-exempt securities

Who are the principal owners of tax-exempt securities? How has this changed over time? What are the main factors in the decisions of the different types of owners about increasing or reducing their holdings of tax-exempt securities?

### Bond overview

Suppose you have a coupon bond with a coupon rate 4.5%, face value of \$1000 and the bond has 3 years to maturityfrom now. what is the yield to maturity if you purchased the bond for \$1000? and what would the price be if the yield to maturity was 10%?

### Bonds

If the price of a bond is higher than its face value yould yield to maturity be higher or lower than the coupon rate in theory? what do we see in the real world?

### Finance - Bonds and their Valuation/2466

I have an excel spreadsheet with 2 question on it. They relate to the valuation of bonds. I have provided the answers, however I am not sure how the answers were derived. I need to know the formula used in Excel to arrive at these answers - or - the steps performed on the HP12C Financial Calculator to arrive at these answers. I

### The Federal Reserve

The Federal Reserve has traditionally conducted open market operations through the purchase and sale of government bonds. In principle, could the Federal Reserve conduct monetary policy through the purchase and sale of stocks on the New York Stock Exchange? Do you see any possible drawbacks to such a policy? Suppose the Feder