Question

Six months ago you purchased a $100,000, 2% coupon bond with 7 years to maturity. The...

Six months ago you purchased a $100,000, 2% coupon bond with 7 years to maturity. The bond makes semi-annual coupon payments, and, at the time of purchase, had a yield-to-maturity of 2.40%, annual rate, compounded semiannually.

a) Calculate price (per hundred dollars of face value) you paid for the bond.

b) Today, after noticing that the yield has dropped to 2.10%, you sell the bond. What is the current price (per hundred dollars of face value)?

c) Calculate your gains or losses, and holding period yield from the purchase and subsequent sale of the bond.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
Six years ago you purchased a $1,000 par bond with 13 years to maturity and a...
Six years ago you purchased a $1,000 par bond with 13 years to maturity and a 6.5% semi-annual coupon at a price of $1,200. If the yield to maturity of the bond remained constant, what should be the price today?
A semi-annual coupon bond with 2 years to maturity and 8% per annum coupon rate has...
A semi-annual coupon bond with 2 years to maturity and 8% per annum coupon rate has a face value of $1,000 with a yield to maturity of 12% per annum (compounded semi-annually). Using the bond’s modified duration, estimate the new bond price when the yield to maturity immediately changes from 12% per annum to 8% per annum. Select one: a. 66.27 dollars.   b. 996.97 dollars. c. 930.70 dollars. d. 864.43 dollars. e. None of the statements is true.
You purchased a $1,000 bond with a 4.6% semi-annual coupon and 15 years to maturity six...
You purchased a $1,000 bond with a 4.6% semi-annual coupon and 15 years to maturity six years ago at a price of $855. If the yield has remained constant, what should be the price of the bond today? A. $959.46 B. $592.55 C. $900.24 D. $898.05
You purchased an annual interest coupon bond one year ago that had six years remaining to...
You purchased an annual interest coupon bond one year ago that had six years remaining to maturity at that time. The coupon interest rate was 10% and the par value was $1,000. At the time you purchased the bond, the yield to maturity was 8%. If you sold the bond after receiving the first interest payment and the yield to maturity continued to be 8%, your annual total rate of return on holding the bond for that year would have...
a bond was issued 5 years ago at par with a maturity of 10 years, a...
a bond was issued 5 years ago at par with a maturity of 10 years, a yield-to-maturity of 6.50% compounded semiannually and semi annual coupons. what is the price of this bond today immediately after the receipt of today's coupon if the YTM has fallen to 5.50% compounded semi annually?
You purchased a 20-year bond 15 years ago at a yield to maturity of 7.56%. The...
You purchased a 20-year bond 15 years ago at a yield to maturity of 7.56%. The bond has a face value of $1,000 and a coupon rate of 9.00%, paid semi-annually. If the investors’ required rate of return on this bond has stayed the same for 15 years, what is the price of the bond today? $1,000.00 $1,058.17 $1,146.13 $1,059.94
A bond was issued three years ago at a price of $1,040 with a maturity of...
A bond was issued three years ago at a price of $1,040 with a maturity of six years, a yield-to-maturity (YTM) of 5.25% compounded semi-annually, and a face value of $1,000 with semi-annualy coupons. What is the price of this bond today immediately after the receipt of today's coupon if the YTM has risen to 6.50% compounded semi-annually?
A bond was issued three years ago at a price of $1,052 with a maturity of...
A bond was issued three years ago at a price of $1,052 with a maturity of six years, a yield-to-maturity (YTM) of 6.75% compounded semi-annually, and a face value of $1,000 with semi-annualy coupons. What is the price of this bond today immediately after the receipt of today's coupon if the YTM has risen to 8.00% compounded semi-annually?
A bond was issued three years ago at a price of $934 with a maturity of...
A bond was issued three years ago at a price of $934 with a maturity of six years, a yield-to-maturity (YTM) of 4.75% compounded semi-annually, and a face value of $1,000 with semi-annualy coupons. What is the price of this bond today immediately after the receipt of today's coupon if the YTM has fallen to 3.50% compounded semi-annually?
A bond was issued three years ago at a price of $1,060 with a maturity of...
A bond was issued three years ago at a price of $1,060 with a maturity of six years, a yield-to-maturity (YTM) of 7.75% compounded semi-annually, and a face value of $1,000 with semi-annualy coupons. What is the price of this bond today immediately after the receipt of today's coupon if the YTM has risen to 9.00% compounded semi-annually?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT