Question

HW9 #7)

Castor owns one bond A and one bond B. The total value of these two bonds is 2,473.41 dollars. Bond A pays semi-annual coupons, matures in 15 years, has a face value of 1,000 dollars, and pays its next coupon in 6 months. Bond B pays annual coupons, matures in 17 years, has a face value of 1,000 dollars, has a yield-to-maturity of 7.08 percent, and pays its next coupon in one year. Both bonds have a coupon rate of 8.22 percent. What is the yield-to-maturity for bond A? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Answer #1

1. Castor owns one bond A and one bond B. The total value of
these two bonds is 2,593.9 dollars. Bond A pays semi-annual
coupons, matures in 14 years, has a face value of 1,000 dollars,
and pays its next coupon in 6 months. Bond B pays annual coupons,
matures in 15 years, has a face value of 1,000 dollars, has a
yield-to-maturity of 4.98 percent, and pays its next coupon in one
year. Both bonds have a coupon rate...

#1) Cy owns investment A and 1 bond B. The total value of his
holdings is 900 dollars. Bond B has a coupon rate of 4.9 percent,
par value of $1000, YTM of 10.5 percent, 22 years until maturity,
and semi-annual coupons with the next coupon due in 6 months.
Investment A is expected to produce annual cash flows forever. The
next cash flow is expected to be 60.4 dollars in 1 year, and
subsequent annual cash flows are expected...

HW9 #8)
Arjen owns investment A and 1 bond B. The total value of his
holdings is 1,600 dollars. Investment A is expected to pay annual
cash flows to Arjen of 220.26 dollars per year with the first
annual cash flow expected later today and the last annual cash flow
expected in 3 years from today. Investment A has an expected return
of 17.75 percent. Bond B pays semi-annual coupons, matures in 13
years, has a face value of $1000,...

HW9 #1)
Today, a bond has a coupon rate of 6.62 percent, par value of
1,000 dollars, YTM of 11.3 percent, and semi-annual coupons with
the next coupon due in 6 months. One year ago, the bond’s price was
969.92 dollars and the bond had 10 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.

HW9 #5)
Cy owns investment A and 1 bond B. The total value of his
holdings is 1,899 dollars. Bond B has a coupon rate of 6.2 percent,
par value of $1000, YTM of 6.38 percent, 17 years until maturity,
and semi-annual coupons with the next coupon due in 6 months.
Investment A is expected to produce annual cash flows forever. The
next cash flow is expected to be 57.27 dollars in 1 year, and
subsequent annual cash flows are...

HW9 #2)
One year ago, a bond had a coupon rate of 11.1 percent, par
value of $1000, YTM of 5.42 percent, and semi-annual coupons.
Today, the bond’s price is 1,076.21 and the bond has 9 years until
maturity. What was the current yield of the bond one year ago? The
next coupon is due in 6 months. Answer as a rate in decimal format
so that 12.34% would be entered as .1234 and 0.98% would be entered
as .0098.

Arjen owns investment A and 1 bond B. The total value of his
holdings is 1,157 dollars. Investment A is expected to pay annual
cash flows to Arjen of 128.37 dollars per year with the first
annual cash flow expected later today and the last annual cash flow
expected in 3 years from today. Investment A has an expected return
of 16.42 percent. Bond B pays semi-annual coupons, matures in 19
years, has a face value of $1000, has a...

1. Arjen owns investment A and 1 bond B. The total value of his
holdings is 1,829 dollars. Investment A is expected to pay annual
cash flows to Arjen of 259.25 dollars per year with the first
annual cash flow expected later today and the last annual cash flow
expected in 4 years from today. Investment A has an expected return
of 12.37 percent. Bond B pays semi-annual coupons, matures in 19
years, has a face value of $1000, has...

Norma has one share of stock and one bond. The total value of
the two securities is 1,298.97 dollars. The stock pays annual
dividends. The next dividend is expected to be 3.59 dollars and
paid in one year. In two years, the dividend is expected to be 6.58
dollars and the stock is expected to be priced at 124.1 dollars.
The stock has an expected return of 16.6 percent per year. The bond
has a coupon rate of 10.58 percent...

Dewey has one share of stock and one bond. The total value of
the two securities is $1,050. The bond has a YTM of 18.60 percent,
a coupon rate of 12.40 percent, and a face value of $1,000; pays
semi-annual coupons with the next one expected in 6 months; and
matures in 6 years. The stock pays annual dividends that are
expected to grow by 1.73 percent per year forever. The next
dividend is expected to be $18.10 and paid...

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