Question

A 5.60% annual coupon, 5-year bond has a yield to maturity of 9.50%. Assuming the par...

A 5.60% annual coupon, 5-year bond has a yield to maturity of 9.50%. Assuming the par value is $1,000 and the yield to maturity is expected not to change over the next year.

a) What should the price of the bond be today?

b) What is the bond price expected to be in one year?

c) What is the expected Capital Gains Yield for this bond?

d) What is the expected Current Yield for this bond?

Homework Answers

Answer #2

answered by: anonymous
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
A 6% coupon, 24-year annual bond has a yield to maturity of 4.4%. Assuming the par...
A 6% coupon, 24-year annual bond has a yield to maturity of 4.4%. Assuming the par value is $1,000 and the YTM does not change over the next year, what will the price of the bond be today? What will the bond price be in one year? What is the capital gains yield for this bond?
A 8.3% coupon, 8-year annual bond has a yield to maturity of 6.3%. Assuming the par...
A 8.3% coupon, 8-year annual bond has a yield to maturity of 6.3%. Assuming the par value is $1,000 and the YTM does not change over the next year, what will the price of the bond be today? What will the bond price be in one year to nearest cent? What is the capital gains yield for this bond?
1.A 12-year bond has a 9 percent annual coupon, a yield to maturity of 11.4 percent,...
1.A 12-year bond has a 9 percent annual coupon, a yield to maturity of 11.4 percent, and a face value of $1,000. What is the price of the bond? 2.You just purchased a $1,000 par value, 9-year, 7 percent annual coupon bond that pays interest on a semiannual basis. The bond sells for $920. What is the bond’s nominal yield to maturity? a.         7.28% b.         8.28% c.         9.60% d.         8.67% e.         4.13% f.          None of the above 3.A bond with...
A 10-year corporate bond has an annual coupon of 9% and a par value of $1,000....
A 10-year corporate bond has an annual coupon of 9% and a par value of $1,000. The bond is currently selling at a premium of 20% to par ($1,200). Which of the following statements is more likely to be CORRECT? a.    The bond’s yield to maturity is 9%. b.   The bond’s current yield is 9%. c.    IF the bond’s yield to maturity remains constant over the next year, an investor owning the bond will earn a capital GAIN of 11%...
11 year 8% annual coupon bond has a yield to maturity of 11.2% with a par...
11 year 8% annual coupon bond has a yield to maturity of 11.2% with a par value of $1,000. What is the price of this bond? (Round to two decimal places)
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 5-year 6.5% annual coupon bond is selling to yield 7%. The bond pays interest annually....
A 5-year 6.5% annual coupon bond is selling to yield 7%. The bond pays interest annually. The par value of the bond is $100. a. What is the price of the 5-year 6.5% coupon bond selling to yield 7%? b. What is the price of this bond one year later assuming the yield is unchanged at 7%? c. Suppose that one year later the yield of the bond decreases to 6.7%. What is the price change attributable to moving to...
PART 2 - BOND CALCULATIONS a) What is the price of a $1,000 par value, semi-annual...
PART 2 - BOND CALCULATIONS a) What is the price of a $1,000 par value, semi-annual coupon bond with 16 years to maturity, a coupon rate of 5.40% and a yield-to-maturity of 5.90%? b) What is the price of a $1,000 par value, 10 year, annual coupon bond with a 5.80% coupon rate and a yield to maturity of 5.50% c) A 10-year, 6.30% semi-annual coupon bond today and the current market rate of return is 5.60%. The bond is...
A 6% annual coupon bond has 11 years remaining until maturity. Par value is $1000. The...
A 6% annual coupon bond has 11 years remaining until maturity. Par value is $1000. The required rate of return (yield to maturity)on the bond is 8.5%. Compute the price of the bond today using the appropriate Excel formula Compute the price of the same bond if it has 10 years remaining to maturity instead of 11. What is the capital gains yield on the bond? What is the current yield on the bond? What is the total yield on...
Question 1 of 71 The yield to maturity on a coupon bond is … ·      always greater...
Question 1 of 71 The yield to maturity on a coupon bond is … ·      always greater than the coupon rate. ·       the rate an investor earns if she holds the bond to the maturity date, assuming she can reinvest all coupons at the current yield. ·      the rate an investor earns if she holds the bond to the maturity date, assuming she can reinvest all coupons at the yield to maturity. ·      only equal to the internal rate of return of a bond...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT