Question

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?

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.

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
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b. What is the bond’s yield to maturity if the
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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 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
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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...

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One year ago, your firm issued 14-year bonds with a coupon rate
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A 10 year Treasury bond with face value of $1000 is currently
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The market price of bond is higher than $1000.
A year from now if the yield to maturity stays the same, the
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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 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
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Yield to maturity
%
c.
What is the yield to maturity if...

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to maturity is 4.0% pa, will this bond sell at a premium, discount
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a.
premium
b.
not enough information provided to determine
c.
at par
d.
discount

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market rate (yield to maturity) is 10%...

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