Question

You pay $10,200 for a 12-year bond with a face value of $11,000 and semiannual coupons...

You pay $10,200 for a 12-year bond with a face value of $11,000 and semiannual coupons at a nominal annual rate of 6% convertible semiannually. The bond can be called at face value on any coupon date starting at the end of year 6. What is the minimum yield that you could receive, expressed as a nominal annual rate of interest convertible semiannually?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer to Question:

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
Matt purchases a 20-year par value bond with 8% semiannual coupons at a price of 1772.25....
Matt purchases a 20-year par value bond with 8% semiannual coupons at a price of 1772.25. The bond can be called at par value X on any coupon date starting at the end of year 15. The price guarantees that Matt will receive a nominal semiannual yield of at least 6%. Bert purchases a 20-year par value bond identical to the one purchased by Matt, except that it is not callable. Assuming a nominal semiannual yield of 6%, the cost...
Matt purchases a 20-year par value bond with 8% semiannual coupons at a price of 1772.25....
Matt purchases a 20-year par value bond with 8% semiannual coupons at a price of 1772.25. The bond can be called at par value X on any coupon date starting at the end of year 15. The price guarantees that Matt will receive a nominal semiannual yield of at least 6%. Bert purchases a 20-year par value bond identical to the one purchased by Matt, except that it is not callable. Assuming a nominal semiannual yield of 6%, the cost...
An n-year bond has face and redemption amount of $100. The bond has level semiannual coupons...
An n-year bond has face and redemption amount of $100. The bond has level semiannual coupons and the yield rate is a nominal annual rate of 6% compounded semiannually. The bond’s book value just after the 8th coupon is $121.30 and just after the 10th coupon, the book value is $120.39. Find the original purchase price of the bond.
Suppose a 5-year bond with a 5% coupon rate, semiannual coupons and a face value of...
Suppose a 5-year bond with a 5% coupon rate, semiannual coupons and a face value of $1000 has a yield to maturity of 8% APR. What is the bond’s yield to maturity expressed as an effective semi-annual rate? What is the bond’s yield to maturity expressed as an effective annual rate (EAR)? What is the price of the bond? If the bond’s yield to maturity changes to 5% APR, what will the bond’s price be?
A 25-year bond with 6% semiannual coupons and a par value of $100 is purchased by...
A 25-year bond with 6% semiannual coupons and a par value of $100 is purchased by Mary for $89.50 on November 22, 1995, with the first coupon to be paid on May 22, 1996. Find the nominal yield convertible semiannually. Give your answer to three decimal places.
A ten-year $100 8% bond with semiannual coupons is traded at $118.20 to yield an annual...
A ten-year $100 8% bond with semiannual coupons is traded at $118.20 to yield an annual nominal rate of 6% convertible semiannually. Calculate the redemption value of the bond. Is the bond traded at premium or discount? Explain your answer. Please provide steps (not Excel) and explanation, thank you very much!!
An investor owns a 14% bond with face value 400 and semiannual coupons. The bond will...
An investor owns a 14% bond with face value 400 and semiannual coupons. The bond will mature at par at the end of 18 years. The investor decides that a ten-year bond would be preferable. Current yield rates are 6.8% convertible semiannually. The investor uses the proceeds from the sale of the 14% bond to purchase an 12% bond with semiannual coupons, maturing at par at the end of ten years.
Mary buys a 10 year bond with $10,000 face value, semiannual nominal bond rate 3%, and...
Mary buys a 10 year bond with $10,000 face value, semiannual nominal bond rate 3%, and semiannual nominal yield rate 4%. She wants to reinvest the semiannual coupons (immediately after each coupon is received) into a fund so that her non time valued net profit at maturity (A.V. of coupons + face value at maturity − bond price) is $5,000. Find the interest rate (as a semiannual nominal rate) that the account must earn for this to occur.
A company must pay liabilities of 5000 in 6 months and 7000 in one year. The only investments available to the company are
A company must pay liabilities of 5000 in 6 months and 7000 in one year. The only investments available to the company are(a) A 6 month bond with face amount 1,000 and a nominal 5% annual coupon rate convertible semiannually, and a 4% nominal annual yield rate convertible semiannually(b) A one-year bond with face amount 1000, a 6% nominal annual coupon rate convertible semiannually, and a 7% nominal annual yield rate convertible semiannually.Find the amount of each bond to purchase...
Q1.  Suppose a​ ten-year,  bond with a face value of $1000 an coupon rate 8.4% p.a. and semiannual...
Q1.  Suppose a​ ten-year,  bond with a face value of $1000 an coupon rate 8.4% p.a. and semiannual coupons is trading for 1034.59 a. What is the​ bond's yield to maturity​ (expressed as an APR with semiannual​ compounding)? b. If the bond's yield to maturity changes to 9.1% APR, what will be the bond's price?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT