Question

Now assume that you purchase a 5-year, $1,000 face
bond with a 3.5% coupon, paid annually, currently selling with a 4%
YTM (yield to maturity). Immediately after you purchase
the bond, the reinvestment rate in the market drops to
3%. What is your realized yield on your bond
investment?

Answer #1

A 5-year, $1,000 face bond with a 3% coupon is currently selling
with a 4% YTM (yield to maturity). What is the purchase price of
the bond?
Immediately after you purchase the bond, the reinvestment rate
in the market drops to 3%. What is your realized yield on your bond
investment?
What is the duration of the bond in
Question?
If market yields were to drop by 1%, what is the approximate
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A bond has $1,000 face value, coupon rate of 3.5%, and yield to
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A 12-year, 5% coupon bond pays interest annually. The bond has a
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1.
What is the price of a bond with the following features?
Face Value = $1,000
Coupon Rate = 7% (stated as an ANNUAL rate)
Semiannual coupon payments
Maturity = 7 years
YTM = 6.34% (Stated as an APR)
State your answer to the nearest penny (e.g., 984.25)
2.
Assume you buy a bond with the following features
Bond maturity = 4
Coupon Rate = 5%
Face Value = $1,000
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When you buy the bond the market interest rate...

Consider a 6¼%-annual coupon bond, with a 30-year
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At the time of the purchase the YTM is 10%. Your plan is to sell
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payment. The YTM is expected to remain constant.
What is the minimum selling price for the bond at the time of
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$906.74
$653.60
$1,099.78
646.49
What is the duration at the time of the...

Mr.
Bond is considering purchasing a bond with 10-year maturity and
$1,000 face value. The coupon interest rate is 8% and the interest
is paid annually. If Mr. Bond requires 11% yield to maturity (YTM)
on the investment, then the price of the bond
is:
$877.11
$773.99
$1,122.87
$823.32

A 9.3 percent coupon (paid semiannually) bond, with a $1,000
face value and 18 years remaining to maturity. The bond is selling
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at $900. An 11.3 percent coupon (paid annually) bond, with a $1,000
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at $1,050. Round your answers to 3 decimal
places!!!!. (e.g.,...

For the? following, assume the normal case that bond coupons
are? semi-annual: ?
a) What is the yield to maturity? (YTM) on a 9?-year, 6.8?%
coupon bond if the bond is currently selling for? $1,000? ? (Assume
semi-annual? coupons) %
?b) What is the YTM on the above bond if the value today is
?$961.08?? %
?c) For the bond in ?a) above?, what is your realized? (actual)
EAR if immediately after you purchase the bond market? rates, and
the...

1. You purchase a 20-year, $1,000 bond with a coupon rate of 6
percent paid annually with a margin requirement of 40 percent.
a. What would be your rate of return if the interest rates
decreased, immediately after purchase, to 4 percent?
b. What would be your rate of return if the interest rates
increased, immediately after purchase, to 8 percent?

1. You purchase a 20-year, $1,000 bond with a coupon rate of 6
percent paid annually with a margin requirement of 40 percent. a.
What would be your rate of return if the interest rates decreased,
immediately after purchase, to 4 percent? b. What would be your
rate of return if the interest rates increased, immediately after
purchase, to 8 percent?

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