Question

Let us compute the price of a Chrysler bond recently listed in the Wall Street Journal. The bonds have a 10% coupon rate, a $1,000 par value (maturity value), and mature in two years. Assume semiannual compounding and that market rates of interest are 12%.

Answer #1

Given that;

Par value or face value is $1000

Coupon rate is 10%.

As the interest is compounded semiannually, the semiannual coupon
rate =10%/2=5%

Semiannual coupon payment=(Semiannual coupon rate)*(Par
value)=5%*1000=50

Time period is 2 years, for semiannual compounding, the number
of periods is 2*2=4

Annual interest rate is 12%, so the semiannual interest rate is
12%/2=6%.

We can determine the present value of the bond using excel as;

**Answer: Hence, the present value is $965.35**

A coupon bond that pays semiannual interest is reported in the
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Compute Bond Price Compute the price of a 4.75 percent coupon bond
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3. The following information for Six Flags bonds is listed on
Wall Street Journal:
Maturity Date
Yield to Maturity
Current Yield
Coupon Rate
04/07/2020
8%
9.17%
10%
If you purchase the bond today and hold it till maturity date, what
is your annual return rate (APR) on the investment from now to
April 2020?
A) Not enough information to
calculate.
B) 10%
C) 9.17%
D) 8%

Calculate the price of a 6.5 percent coupon bond with 17 years
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(Assume interest rates are semiannual and par value is $1,000.) Is
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28.You purchase a Chrysler bond with a par value of $1,000 that
carries a semi-annual coupon rate of 4%, has a 5-year maturity and
sells at par. (7 points)
a.What will be the bond’s price one year later if the YTM has
decreased by 1%?
b.If you sell the bond at the price (a) above, what was is your
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10. Consider the following U.S. Treasury bond quotation from The
Wall Street
Journal. It is June 27, 2020. The bond has a $1,000 face value and
pays semiannual
coupons.
Maturity Coupon Bid Asked Chg AskedYld
06/27/2027 3.675 76.1625 ????? +0.18 8.000
(a) (3 points) How much will an investor receive if he/she sells
this T-bond?
(b) (4 points) Fill in the missing information for Asked?
Could you explain the question in detail with formula plz! I
don't understand others poster...

In 2012, an article in the Wall Street Journal had the
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Source: Matt Wirz, "As Corporate-Bond Yields Sink, Risks for
Investors Rise," Wall Street Journal, August 14, 2012.
The risks of holding long-term corporate bonds at low interest
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Determinants of Interest Rates for Individual Securities The
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Exercise 10-8A Computing bond interest and price; recording bond
issuance LO C2, P3
Citywide Company issues bonds with a par value of $65,000 on
their stated issue date. The bonds mature in nine years and pay 10%
annual interest in semiannual payments. On the issue date, the
annual market rate for the bonds is 8%. (Table B.1, Table B.2,
Table B.3, and Table B.4) (Use appropriate factor(s) from
the tables provided.)
1. What is the amount of each semiannual interest...

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