Question

Q2: A corporate bond has 22 years to maturity, a face value of $1,000, a coupon rate of 5.2% and pays interest semiannually. The annual market interest rate for similar bonds is 3.3% and is quoted as a semi-annually compounded simple interest rate, i.e 1.65% per 6-month period.

What is the price of the bond?

Answer #1

A corporate bond has
17 years to maturity, a face value of $1,000, a coupon rate of 5.3%
and pays interest semiannually. The annual market interest rate for
similar bonds is 3.2% and is quoted as a semi-annually compounded
simple interest rate, i.e 1.6% per 6-month period.
What is the price of
the bond?

A corporate bond has 16 years to maturity, a face value of
$1,000, a coupon rate of 4.6% and pays interest twice a year. The
annual market interest rate for similar bonds is 3.4%.
What is the price of the bond (in $)?
2 years later, the market interest rate for similar bonds has
gone up to 4.4%. What is the new price of the bond (in
$)?

A corporate bond has a face value of $1000 with a maturity date
20 years from today. The bond pays interest semiannually at a rate
of 8% based on the face value (this means 8%/yr/semi). The interest
rate paid on similar corporate bonds has decreased to a current
rate of 6%/yr/semi (this would be i – the yield rate). What is the
market value of this bond, or what should an investor pay for the
bond?

A corporate bond has 2 years to maturity, a coupon rate of 8%, a
face value of $1,000 and pays coupons semiannually. The market
interest rate for similar bonds is 9.5%. Duration is 1.886 years,
NPV is 973.25.
a. If yields fall by 0.8 percentage points,
what is the new expected bond price based on its duration (in
$)?
b. What is the actual bond price after the change in yields (in
$)?
c. What is the difference between the...

Consider a corporate bond with a face value of $1,000, 2 years
to maturity and a coupon rate of 4%. Coupons are paid
semi-annually. The next coupon payment is to be made exactly 6
months from today. What is this bond's price assuming the following
spot rate curve. 6-month spot rate: 3.2%. 12-month: 5%. 18-month:
5.5%. 24-month: 5.8%.

Consider a corporate bond with a face value of $1,000, 2 years
to maturity and a coupon rate of 4%. Coupons are paid
semi-annually. The next coupon payment is to be made exactly 6
months from today. What is this bond's price assuming the following
spot rate curve. 6-month spot rate: 3.2%. 12-month: 5%. 18-month:
5.5%. 24-month: 5.8%.

Consider a corporate bond with a face value of $1,000, 2 years
to maturity and a coupon rate of 5%. Coupons are paid
semi-annually. The next coupon payment is to be made exactly 6
months from today. What is this bond's price assuming the following
spot rate curve. 6-month spot rate: 3.1%. 12-month: 5%. 18-month:
5.5%. 24-month: 5.8%. Assume semi-annual compounding. Round your
answer to the nearest cent (2 decimal places).

Consider a corporate bond with a face value of $1,000, 2 years
to maturity and a coupon rate of 4%. Coupons are paid
semi-annually. The next coupon payment is to be made exactly 6
months from today. What is this bond's YTM assuming the following
spot rate curve. 6-month spot rate: 4%. 12-month: 5%. 18-month:
5.5%. 24-month: 6%. Assume semi-annual compounding. Round your
answer to 4 decimal places. For example if your answer is 3.205%,
then please write down 0.0321.

Consider a corporate bond with a face value of $1,000, 2 years
to maturity and a coupon rate of 5%. Coupons are paid
semi-annually. The next coupon payment is to be made exactly 6
months from today. What is this bond's YTM assuming the following
spot rate curve. 6-month spot rate: 4%. 12-month: 5%. 18-month:
5.5%. 24-month: 8%. Assume semi-annual compounding. Round your
answer to 4 decimal places. For example if your answer is 3.205%,
then please write down 0.0321.

What is the price of a 30-year, 7% coupon rate, $1,000 face
value bond that pays interest semi-annually, if the yield to
maturity on similar bonds is 6%?
a. $886.9
b. $940.7
c. $1,065.6
d. $1,138.4
e. $1,219.2

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