Question

Bond A has the following features:          Face value = $1,000,        Coupon Rate = 5%,        Maturity...

Bond A has the following features:

         Face value = $1,000,       

Coupon Rate = 5%,       

Maturity = 10 years, Yearly coupons

         The market interest rate is 6.30%

What is the current yield for bond A from today to year 1?

Calculate your answer to 2 decimal places (e.g., 5.23)

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The current yield = Annual coupon/Current price

FV = 1,000

Annual coupon, cpn = 1,000 * 0.05 = 50

n = 10

r = 6.3%

The current yield = Annual coupon/Current price

The current yield = 50/905.6642395147

The current yield = 0.0552080979

The current yield = 5.52080979%

The current yield = 5.52%

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
Bond A has the following features: Face value = $1,000, Coupon Rate = 5%, Maturity =...
Bond A has the following features: Face value = $1,000, Coupon Rate = 5%, Maturity = 9 years, Yearly coupons The market interest rate is 7.92% If interest rates remain at 7.92%, what is the percentage capital gain or loss on bond A if you sell the bond in year 1? State your answer to 2 decimal places (e.g., 3.56, 0.29) If there is a capital loss make sure to include a negative sign in your answer (e.g., -0.23).
Bond A has the following features: Face value = $1,000, Coupon Rate = 10%, Maturity =...
Bond A has the following features: Face value = $1,000, Coupon Rate = 10%, Maturity = 9 years, Yearly coupons The market interest rate is 3.41% If interest rates remain at 3.41%, what is the percentage capital gain or loss on bond A if you sell the bond in year 1? State your answer to 2 decimal places (e.g., 3.56, 0.29) If there is a capital loss make sure to include a negative sign in your answer (e.g., -0.23)
Bond A has the following features:          Face value = $1,000,        Coupon Rate = 8%,        Maturity...
Bond A has the following features:          Face value = $1,000,        Coupon Rate = 8%,        Maturity = 10 years, Yearly coupons          The market interest rate is 4.84%          If interest rates remain at 4.84%, what will the price of bond A be in year 1?
Bond A has the following features:          Face value = $1,000,        Coupon Rate = 9%,        Maturity...
Bond A has the following features:          Face value = $1,000,        Coupon Rate = 9%,        Maturity = 6 years, Yearly coupons          The market interest rate is 5.34% If interest rates remain at 5.34%, what is the percentage capital gain or loss on bond A if you sell the bond in year 1? State your answer to 2 decimal places (e.g., 3.56, 0.29) If there is a capital loss make sure to include a negative sign in your answer (e.g.,...
5- Bond A has the following features:          Face value = $1,000,        Coupon Rate = 8%,       ...
5- Bond A has the following features:          Face value = $1,000,        Coupon Rate = 8%,        Maturity = 9 years, Yearly coupons          The market interest rate is 5.05%          If interest rates remain at 5.05%, what will the price of bond A be in year 1?
Bond E has the following features: Face value = $1,000, Coupon Rate = 7%, Maturity =...
Bond E has the following features: Face value = $1,000, Coupon Rate = 7%, Maturity = 5 years, Yearly coupons The market interest rate is 3.09% If interest rate remains at 3.09% for the life of the bond (i.e., 3.09 years), what is the price of Bond E in year 2?
Bond E has the following features:          Face value = $1,000,        Coupon Rate = 9%,         Maturity...
Bond E has the following features:          Face value = $1,000,        Coupon Rate = 9%,         Maturity = 5 years, Yearly coupons          The market interest rate is 3.47% If interest rate remains at 3.47% for the life of the bond (i.e., 3.47 years), what is the price of Bond E in year 2?
3- Bond A has the following features:          Face value = $1,000,        Coupon Rate = 4%,       ...
3- Bond A has the following features:          Face value = $1,000,        Coupon Rate = 4%,        Maturity = 10 years, Yearly coupons          The market interest rate is 4.6% What is today’s price of bond A?
If interest rates remain at 7.20%, what is the percentage capital gain or loss on bond A if you sell the bond in year 1?
1) Bond A has the following features:         Face value = $1,000,       Coupon Rate = 6%,       Maturity = 10 years, Yearly coupons         The market interest rate is 7.20%If interest rates remain at 7.20%, what is the percentage capital gain or loss on bond A if you sell the bond in year 1?State your answer to 2 decimal places (e.g., 3.56, 0.29)If there is a capital loss make sure to include a negative sign in your answer (e.g., -0.23)2) Bond E has the following...
       Bond E has the following features:          Face value = $1,000,        Coupon Rate = 4%,        ...
       Bond E has the following features:          Face value = $1,000,        Coupon Rate = 4%,         Maturity = 5 years, Yearly coupons          The market interest rate is 3.55% If interest rate remains at 3.55% for the life of the bond (i.e., 3.55 years), what is the price of Bond E in year 4?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT