Question

Three years ago, you bought a bond for $737.64. At that time, the bond had seven years remaining until maturity. The bond has a coupon rate of 8 percent (stated as an annual rate) and a par value of $1,000. Coupon payments are made semiannually.

a. What was the yield to maturity when you purchased the bond three years ago?

b. Assume the yield to maturity today is the same as the yield to maturity you computed in part A. What is the value of the bond today?

Answer #1

26.
5 years ago, you bought a Ford bond. At the time of the
purchase, the bond had a coupon rate of 8% paid semiannually, a par
value of $1,000, and a time to maturity of 25 years. What is the
expected price of the bond today if the interest rate is 12%?
Select one:
a. $701.65
b. $699.07
c. $697.43
d. 703.87

Five years ago, Rock Steady Corp issued a semiannual coupon bond
with seven years until maturity. This bond was originally issued at
par with a $1,000 face value. The coupon rate on the bond is 8%.
Today, the yield-to-maturity (YTM) is 10%. Assume an investor
bought the bond at the time it was issued and sold it today. What
is the holding period return for the five year period of
investment? Please provide the formula you used, and show your...

Five years ago, Rock Steady Corp issued a semiannual coupon bond
with seven years until maturity. This bond was originally issued at
par with a $1,000 face value.
The coupon rate on the bond is 8%. Today, the yield-to-maturity
(YTM) is 10%.
Assume an investor bought the bond at the time it was issued and
sold it today. What is the holding period return for the five year
period of investment?
0.3389
0.3422
0.3654
0.3838

Five years ago, Rock Steady Corp issued a semiannual coupon bond
with seven years until maturity. This bond was originally issued at
par with a $1,000 face value.
The coupon rate on the bond is 8%. Today, the yield-to-maturity
(YTM) is 10%.
Assume an investor bought the bond at the time it was issued and
sold it today. What is the holding period return for the five year
period of investment? please provide step by step solution!

A bond with seven years to maturity pays a 5.5% coupon
semiannually. The par value of the bond is $1,000 and the current
price is $971.76.
a) If you bought the bond today, what yield to maturity would
you earn if you held it to maturity?
b) If you sold it for $986.22 in one year, what would your total
return be? Assume you collect both coupon payments.

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...

Suppose you bought a Terrapin Aluminum Company bond two years
ago. At the time, the semiannual bond had 10-years to maturity,
$1000 par value, with a coupon rate of 2%. Two years ago when you
bought the bond, the market interest rates were 1%. You still own
the bond today but interest rates have increased to 3%. When you
purchased the bond two years ago, what was its price, and what is
the new price of the bond today?
Group...

6 years ago you bought a bond with a par value of $1000 for
$950. The bond has a coupon rate of 5%. You purchased the bond for
$950. You collected the first coupon five years ago and you
reinvested it at a rate of 5%. The coupon you collected four years
ago was reinvested at 6%. The one you collected three years ago was
reinvested at 3%. The coupons collected two years ago and last year
were not invested....

Fresh Fruit, Inc. has a $1,000 par value bond that is currently
selling for $867. It has an annual coupon rate of 10.51 percent,
paid semiannually, and has 26-years remaining until maturity. What
would the annual yield to maturity be on the bond if you purchased
the bond today and held it until maturity?

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...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 2 minutes ago

asked 8 minutes ago

asked 11 minutes ago

asked 12 minutes ago

asked 12 minutes ago

asked 19 minutes ago

asked 19 minutes ago

asked 20 minutes ago

asked 20 minutes ago

asked 23 minutes ago

asked 25 minutes ago

asked 25 minutes ago