Question

A bond has an 8.2 percent coupon (and makes semi-annual coupon payments), a $1,000 par value, matures in 12.5 years, and is priced to provide a yield to maturity of 7.00 percent.

What is the current yield?

Answer #1

First of all lets find prirce of the bond

Here face value = $1000 ,

Interest = face value x coupon rate

= 1000 x 8.2% x 1/2

= 41$

n = no of coupon payments= 12.5 x 2 = 25

YTM = 7%/2 = 3.5%

Value of bond = Interest x PVIFA(YTM%,n) + redemption value x
PVIF(YTM%,n)

PVIFA(YTM%,n) = [1-(1/(1+r)^n / r ]

PVIFA(3.5%,25) = [1-(1/(1+3.5%)^25 / 3.5%]

=[1-(1/(1+0.035)^25 / 0.035]

=[1-(1/(1.035)^25 / 0.035]

=[1-0.4231/ 0.035]

=0.5769/0.035

=16.4815

PVIF(3.5%,25) = 1/(1+3.5%)^25

=1/(1.035)^25

= 0.42315

Value of bond = 41 x 16.4815 + 1000 x 0.42315

=675.74 + 423.15

= 1098.89 $

Current yield = Coupon payment/current market price

=41/1098.89

=3.73%

**Annual current yield = 3.73% x 2 = 7.46%**

What is the Coupon Rate of a bond that makes semi-annual coupon
payments and has a current price of $967.70, a par value of $1000,
a YTM of 8.2%, and has 13.5 years until maturity?

8) Assume that a bond has a coupon rate of 10 percent, makes
annual coupon payments, and has a par value of $1,000. Calculate
the bond’s value under the following conditions.
The bond matures in 5 years and the YTM is 5%:
The bond matures in 5 years and the YTM is 10%:
The bond matures in 5 years and the YTM is 15%:
The bond matures in 15 years and the YTM is 5%:
The bond matures in 15...

An
8%, semi-annual coupon bond has a $1,000 face value and matures in
8 years. What is the current yield on this bond if the yield to
maturity is 7.8%?

Gugenheim, Inc., has a bond outstanding with a coupon rate of
7.3 percent and annual payments. The yield to maturity is 8.2
percent and the bond matures in 24 years. What is the market price
if the bond has a par value of $2,000?
$1,816.39
$1,818.78
$1,812.39
$1,849.87
$1,813.60

2. Today, a bond has a coupon rate of 8.4 percent, par value of
1,000 dollars, YTM of 4.82 percent, and semi-annual coupons with
the next coupon due in 6 months. One year ago, the bond’s price was
1,041.94 dollars and the bond had 17 years until maturity. What is
the current yield of the bond today? Answer as a rate in decimal
format so that 12.34% would be entered as .1234 and 0.98% would be
entered as .0098.
3....

Bond Sam has 6% coupons, makes semi-annual payments and is
priced at par value. Bond sam has 6 years to maturity. If interest
rates suddenly rise by 2% what is the percentage change in the
price of bond Sam?

A coupon bond pays annual interest, has a par value of $1,000,
matures in four years, has a coupon rate of 10%, and has a yield to
maturity of 12%. The current yield on this bond is

Casey corporation has a bond outstanding with a coupon rate of
5.56% and semi annual payments. the bond has a yield to maturity of
6.7% a par value of 2000 and matures and 11 years. what is the
quoted price of the bond

A $1000 par value bond has a coupon rate of 7.7%, pays interest
semi-annually, matures in 22 years, and is priced at a 82.97
discount from par value. What is the annual yield to maturity of
this bond? (Answer to the nearest one hundedth of a percent, i.e.,
1.23 but do not include the % sign).

A 20-year, $1,000 par value bond has a 9% semi-annual coupon.
The bond currently sells for $925. If the yield to maturity remains
at its current rate, what will the price be 8 years from now?
a.
$937.7
b.
$956.95
c.
$939.85
d.
$503.21

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 7 minutes ago

asked 7 minutes ago

asked 32 minutes ago

asked 33 minutes ago

asked 55 minutes ago

asked 55 minutes ago

asked 58 minutes ago

asked 58 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago