Question

1) A 2-year maturity bond with face value of $1000 makes annual coupon payments of $80....

1) A 2-year maturity bond with face value of $1000 makes annual coupon payments of $80. At a yield to maturity of 8 percent, the bond must be selling for

2) A 2-year maturity bond with face value of $1000 makes annual coupon payments of 8 percent per annum and is currently selling at par. What return will you earn on the bond if you buy it today and sell it at the end of the year when the yield to maturity is 8 percent?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Explanation: In both the cases, since the interest rate and yield to maturity is same i.e., current price will always be same as par value.

Note: In case of any clarification, please do comment. Thank you.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A 25-year maturity bond with face value of $1,000 makes annual coupon payments and has a...
A 25-year maturity bond with face value of $1,000 makes annual coupon payments and has a coupon rate of 8.1%. (Do not round intermediate calculations. Enter your answers as a percent rounded to 3 decimal places.) a. What is the bond’s yield to maturity if the bond is selling for $910? b. What is the bond’s yield to maturity if the bond is selling for $1,000? c. What is the bond’s yield to maturity if the bond is selling for...
A 20-year maturity bond with face value of $1,000 makes annual coupon payments and has a...
A 20-year maturity bond with face value of $1,000 makes annual coupon payments and has a coupon rate of 8.8%. (Do not round intermediate calculations. Enter your answers as a percent rounded to 3 decimal places.) a. What is the bond’s yield to maturity if the bond is selling for $980? b. What is the bond’s yield to maturity if the bond is selling for $1,000? c. What is the bond’s yield to maturity if the bond is selling for...
What is the price of a $1000 face value zero-coupon bond with 4 years to maturity...
What is the price of a $1000 face value zero-coupon bond with 4 years to maturity if the required return on these bonds is 3%? Consider a bond with par value of $1000, 25 years left to maturity, and a coupon rate of 6.4% paid annually. If the yield to maturity on these bonds is 7.5%, what is the current bond price? One year ago, your firm issued 14-year bonds with a coupon rate of 6.9%. The bonds make semiannual...
A 10 year Treasury bond with face value of $1000 is currently offering 8% annual coupon...
A 10 year Treasury bond with face value of $1000 is currently offering 8% annual coupon rate and 6% yield to maturity. Which of the following statements about the bond is NOT true? The market price of bond is higher than $1000. A year from now if the yield to maturity stays the same, the market price of the bond will be higher than what it is today. If you buy the bond today and hold it until the bond...
A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a...
A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 9.2%. (Do not round intermediate calculations. Enter your answers as a percent rounded to 3 decimal places.) a. What is the yield to maturity if the bond is selling for $960?   Yield to maturity %   b. What is the yield to maturity if the bond is selling for $1,000?   Yield to maturity %   c. What is the yield to maturity if...
A 15 year bond was issued six years ago. It has a Face Value of $1000...
A 15 year bond was issued six years ago. It has a Face Value of $1000 and makes annual coupon payments of $42. If the current yield to maturity is 4.0% pa, will this bond sell at a premium, discount or at par today? a. premium b. not enough information provided to determine c. at par d. discount
DK ent has issued a Ghs 1000 face value bond that makes coupon payments of Ghs...
DK ent has issued a Ghs 1000 face value bond that makes coupon payments of Ghs 40 semi-annually. the bond has a 30-year maturity and is selling for Ghs 1276.76.calculate the current yield
A 25-year maturity bond with par value $1,000 makes semiannual coupon payments at a coupon rate...
A 25-year maturity bond with par value $1,000 makes semiannual coupon payments at a coupon rate of 8%. a. Find the bond equivalent and effective annual yield to maturity of the bond if the bond price is $950. (Round your intermediate calculations to 4 decimal places. Round your answers to 2 decimal places.) Bond equivalent yield to maturity % Effective annual yield to maturity %
A bond with a face value of $1000 makes quarterly payments of $20. The bond is...
A bond with a face value of $1000 makes quarterly payments of $20. The bond is currently selling for $1047.83 and has 10 years remaining until maturity. What is the bond's official yield-to-maturity? Write your answer out to four decimals - for example, write 6.18% as .0618.
1)What is the price of a bond if the par value is $1000, the coupon rate...
1)What is the price of a bond if the par value is $1000, the coupon rate is 5%(paid semi-annually), has 20 years to maturity and the market rate (yield to maturity per annum) is 8%? A. $683.11 B. $703.11 C. $813.11 D. $923.11 E. 1063.11 2) What is the coupon rate of a bond with a par value of $1000, it is currently selling for $800, has 15 years to maturity and the market rate (yield to maturity) is 10%...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT