Question

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, has a coupon rate of 9.76 percent, and pays its next coupon in 6 months. What is the yield-to-maturity for bond B? 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

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...

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...

#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...

1. Cy owns investment A and 1 bond B. The total value of his
holdings is 1,517 dollars. Bond B has a coupon rate of 8.4 percent,
par value of $1000, YTM of 8.42 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 70.82 dollars in 1 year, and
subsequent annual cash flows are expected...

Cy owns investment A and 1 bond B. The total value of his
holdings is 1,891 dollars. Bond B has a coupon rate of 8.88
percent, par value of $1000, YTM of 7.18 percent, 14 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 79.59 dollars in 1
year, and subsequent annual cash flows are expected to...

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...

Demarius owns investment A and 1 share of stock B. The total
value of his holdings is 2,443.27 dollars. Investment A is expected
to pay annual cash flows to Demarius of 380 dollars per year with
the first annual cash flow expected later today and the last annual
cash flow expected in 6 years from today. Investment A
has an expected annual return of 11.56 percent. Stock B is expected
to pay annual dividends of 37.01 dollars forever with the...

Demarius owns investment A and 1 share of stock B. The total
value of his holdings is 2,196.22 dollars. Investment A is expected
to pay annual cash flows to Demarius of 250 dollars per year with
the first annual cash flow expected later today and the last annual
cash flow expected in 6 years from today. Investment A has an
expected annual return of 11.01 percent. Stock B is expected to pay
annual dividends of 43.2 dollars forever with the...

Tim owns investment A and 1 bond B. The total value of his
holdings is $4300. Investment A is expected TO PAY
ANNUAL CASH FLOWS TO Tim OF $650 per year with the first annual
cash flow expected later today and the last annual cash flow
expected in six years from today. Investment A has an expected
return of 13.81 percent. Bond B pays semi annual coupons, matures
in fifteen years, has a face value of $1000, has a coupon rate...

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