Question

Kindly give me all answers its all linked. a. Today you purchase a $600 face-value, 8%...

Kindly give me all answers its all linked.

a. Today you purchase a $600 face-value, 8% coupon bond for $600. This bond matures over 10 years. What is the value of the cash flow in year 5?

b. What is the present value (discounted value) of the last cash flow of the bond?

c. Find the sum of all present values of all coupon payments for this bond.

d. What is the price of this bond when it has one year left to maturity? Assume that the interest rate remains constant over the life of the bond.

Homework Answers

Answer #1

In case of any doubts or issues, please comment below

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose you purchase a zero-coupon bond (coupon = 0%) with a face value of $1,000 and...
Suppose you purchase a zero-coupon bond (coupon = 0%) with a face value of $1,000 and a maturity of 25 years, for $200. If the yield to maturity on the bond remains unchanged, what will the price of the bond be 5 years from now? $800.00 $253.64 $297.58 $275.95 $267.52
1a. The face value of the Treasury Bill is $1000 and it has 40 days to...
1a. The face value of the Treasury Bill is $1000 and it has 40 days to maturity. What is the price of this Treasury Bill if the discount rate is 3%? $ 1,080 $ 1,463 $ 1300.32 $ 996.66 1b. An inflation linked bond (floating rate bond) matures in 2 years and has and a face value of $1,000 and a coupon rate of 10%. Inflation rate over the first year is 1% and the inflation rate over the second...
a)You purchase a 3-year US government bond with a face value of €1,000 and semi-annual coupon...
a)You purchase a 3-year US government bond with a face value of €1,000 and semi-annual coupon payments amounting to €25. The bond will still make six coupon payments plus pay back the principal. If the semi-annual yield to maturity is currently 5%, the present value of this bond would be? b) Computer stocks currently provide an expected rate of return of 16%. MBI, a large computer company, will pay a year-end dividend of €2 per share. If the stock is...
a. Several years ago, Castles in the Sand Inc. issued bonds at face value of $1,000...
a. Several years ago, Castles in the Sand Inc. issued bonds at face value of $1,000 at a yield to maturity of 6%. Now, with 6 years left until the maturity of the bonds, the company has run into hard times and the yield to maturity on the bonds has increased to 11%. What is the price of the bond now? (Assume semiannual coupon payments.) b. Suppose that investors believe that Castles can make good on the promised coupon payments...
A bond with face value of KD 2000 is purchased for KD 1800. The bond payments...
A bond with face value of KD 2000 is purchased for KD 1800. The bond payments are made on semi annual basis with an coupon rate of 6 % The bond matures in 8 years . a) Draw cash flow diagram of the bond. b) Calculate the bond current yield c) Calculate yield to maturity interest rate. (Show all calculation with trial and error)
The price today of a one-year zero coupon bond with face value £100 is £98. The...
The price today of a one-year zero coupon bond with face value £100 is £98. The price today of a two year 5% coupon bond (annual coupon payments) with face value £100 is £103. What is the price of a two-year zero coupon bond with face value £100?
assume you have a one year investment horizon and purchase a semiannual coupon bond today that...
assume you have a one year investment horizon and purchase a semiannual coupon bond today that pays 9% coupon anually, had a bar of 1000 matures in 20 years and 10% ytm. If you owned the bond for exactly one year( exactly 19 of maturity left ) and the bond is currently yelding 8% to maturity . What is the rate of return? a- 9.84% b- -5.24% c- 10% d- -11.80%
2. Today, a bond has a coupon rate of 8.4 percent, par value of 1,000 dollars,...
2. Today, a bond has a coupon rate of 8.4 percent, par value of 1,000 dollars, YTM of 4.82 percent, and semi-annual coupons with the next coupon due in 6 months. One year ago, the bond’s price was 1,041.94 dollars and the bond had 17 years until maturity. What is the current yield of the bond today? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098. 3....
Last year, Joan purchased a $1,000 face value corporate bond with an 8% annual coupon rate...
Last year, Joan purchased a $1,000 face value corporate bond with an 8% annual coupon rate and a 25-year maturity. At the time of the purchase, it had an expected yield to maturity of 9.08%. If Joan sold the bond today for $1,106.92, what rate of return would she have earned for the past year? Round your answer to two decimal places.
A bond with a face value of $1000 made a payment earlier today and has exactly...
A bond with a face value of $1000 made a payment earlier today and has exactly 2 years left until it matures. The bond makes semi-annual payments of $40 each. Currently, the interest rate on newly-issued, same-risk bonds is 8.62%. What is the value of this bond?