Question

Brady purchased a $25 000, 10.5 percent bond redeemable at par with semi-annual coupon payments. He purchased the bond 10 years before maturity to yield 12 percent compounded semi-annually. Six years after purchasing the bond (four years before maturity), what would be his selling price if the yield to maturity has not changed?

Answer #1

A $50,000, 9.00% bond redeemable at par, with annual coupon
payments, is purchased 7 years before maturity to yield 6.00%
compounded annually.
a. What was the purchase price of the bond?
Round to the nearest cent
b. What was the amount of discount or premium
on the bond?

A $15 000, 8% bond with semi-annual interest coupons redeemable at
par in seven years is bought to yield 7% compounded semi-annually.
Determine the amount of premium or discount.

A $7,000, 10% bond redeemable at par with semi-annual
coupons bought nine years before maturity to yield 9% compounded
semi-annually is sold four years before maturity at 93.625.
Find the gain or loss on the sale of the bond.
(Round the final answer to the nearest cent as needed. Round
all intermediate values to six decimal places as needed.)

Mr. Simpson buys a $1000 semi-annual coupon bond paying interest
at 6.8%/year compounded semi-annually and redeemable at par in 12
years. Mr. Simpson's desired yield rate is 9.8%/year compounded
semi-annually. How much did he pay for the bond?

Mr. Simpson buys a $1000 semi-annual coupon bond paying interest
at 11.3%/year compounded semi-annually and redeemable at par in 16
years. Mr. Simpson's desired yield rate is 14.3%/year compounded
semi-annually. After 9 years he sells the bond. Interest rates have
dropped and the bond is sold to yield a buyer 12.8%/year compounded
semi-annually. Determine the sale price.

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?

A $10 000, 8.2% bond with semi-annual coupons is purchased 3
years before maturity. Calculate the discount or premium if the
bond is sold to yield 6% compounded semi-annually.

A $51,000, 88% bond redeemable at 104 with semi-annual
coupons bought eleven years before maturity to yield 9% compounded
semi-annually is sold three years before maturity at 102.25. Find
the gain or loss on the sale of the bond.
(Round the final answer to the nearest cent as needed. Round
all intermediate values to six decimal places as needed.)

Jose purchased a euro bond, which has a par value of $1,000, a
3% annual coupon rate, and an annual yield to maturity of 2.80%
with five years until maturity. The euro bond pays semiannual
coupons. After two years Jose received four semi-annual coupons and
he sold the bond at a price of $1010. If he was able to invest the
coupons at a semi-annual return of 2.50%, what is his total
realized return over the two years?

A $8000 bond that pays 6% semi-annually is redeemable at par in
18 years. Calculate the purchase price if it is sold to yield 8%
compounded semi-annually.

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