Question

Calculate the current value of a 7-year, 6.4%, annual bond whose YTM is 8.4%. Then calculate...

Calculate the current value of a 7-year, 6.4%, annual bond whose YTM is 8.4%. Then calculate the current value again but assume its a semi annual bond. Which one would be more valuable?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Price the following: 12-year, $1000 par value, 6% semi-annual coupon bond whose current nominal yield-to-maturity (YTM)...
Price the following: 12-year, $1000 par value, 6% semi-annual coupon bond whose current nominal yield-to-maturity (YTM) is 8%. 10-year, $1000 par value, 8% quarterly coupon bond whose current nominal YTM is 7%. 30-year, $1000 par value, zero-coupon bond whose current nominal YTM is 9.5%. 13-year, $1000 par value, 8% monthly coupon bond whose current nominal YTM is 10%. 5-year, $500 par value, 8% semi-annual coupon bond whose current nominal YTM is 8.25%
The current YTM of a semi annual bond with a 6.2 year duration is 9.2%. Calculate...
The current YTM of a semi annual bond with a 6.2 year duration is 9.2%. Calculate the percentage rate of change in the price of the bond if the YTM increases by 80 basis points.
1A) Calculate the yield to maturity (i.e., YTM) for the following bond. The bond matures in...
1A) Calculate the yield to maturity (i.e., YTM) for the following bond. The bond matures in 18 years, has a coupon rate of 8.8% with semi-annual payments. The par value of the bond is $1000, while the current market value equals $653.08. (Round to 100th of a percent and enter your answer as a percentage, e.g., 12.34 for 12.34%) 1B) How much would you pay for a zero coupon bond with a par value of $1000, a maturity of 5...
2. Today, a bond has a coupon rate of 8.4 percent, par value of 1,000 dollars,...
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....
QUESTION 7 A 10-year bond pays an annual coupon, its YTM is 8%, and it currently...
QUESTION 7 A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. Which of the following statements is CORRECT? The bond’s coupon rate is less than 8% The bond’s coupon rate is more than 8% The bond’s coupon rate is equal to 8% The bond’s current yield is less than 8%. The bond’s current yield is equal to 8% QUESTION 10 If a stock's dividend is expected to grow at a constant...
A 10-year corporate bond has a coupon rate of 6% with annual payments. If interest rates...
A 10-year corporate bond has a coupon rate of 6% with annual payments. If interest rates rise to 7% on similar bonds then what is the value of the bond in the marketplace? A 10-year corporate bond has a coupon rate of 6% with annual payments. If interest rates rise to 5% on similar bonds then what is the value of the bond in the marketplace? A 10-year corporate bond has a coupon rate of 6% with semi-annual payments. If...
3) A bond currently sells for $850.  It has an eight-year maturity, an annual coupon of $80...
3) A bond currently sells for $850.  It has an eight-year maturity, an annual coupon of $80 but paid semi-annually, and a par value of $1,000. This bond has a callable feature. If this bond can be called after 5 years, for $1,025. (1) What is its annual yield to maturity?   (2) What is its current yield?     (3) What is the bond’s nominal yield to call (YTC)? (4)   If you bought this bond, would you be more likely to earn the YTM...
A 20-year, 9% semi-annual bond with a PAR value of $1,000 is currently selling for $1175...
A 20-year, 9% semi-annual bond with a PAR value of $1,000 is currently selling for $1175 with a YTM of 7.3201%. The bond could be called after SEVEN (7) years for a CALL price of $1060. CALCULATE: YTC (Yield to CALL) COMPLETE: Call Decision (yes or no) choice
A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at...
A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. Which of the following statements is CORRECT? The bond’s coupon rate is equal to 8% The bond’s current yield is less than 8%. The bond’s current yield is equal to 8% The bond’s coupon rate is less than 8% The bond’s coupon rate is more than 8%
Chavez Industries, has an outstanding bond that has a $1000 face value and a 6.4% coupon...
Chavez Industries, has an outstanding bond that has a $1000 face value and a 6.4% coupon rate. Interest is paid semi-annually. The bond has 7 years remaining until it matures. Today the interest rate on similar risk bonds is 5.7% and it is expected to remain at this level for many years in the future. Compute the following: A). The bond’s current price B). The bond’s price one year from today C). The current yield the bond will generate this...