Question

Suppose that you just purchased a Baa rated $1000 annual coupon bond with an 5.3 % coupon rate and a 4 -year maturity. If the yield to maturity on the bond is 6.495 %, how much did you pay?

Answer #1

Suppose that you purchased a Baa rated $1000 annual coupon bond
with an 8.1% coupon rate and a 9-year maturity at par value. The
current rate on 9-year US treasuries is 3%. Two years
later, you look in the newspaper, and find that the yield on
comparable debt is 6.892%, how much is the bond currently
worth?

Suppose that you purchased a Baa rated $1000 annual coupon bond
with an 7.8% coupon rate and a 19-year maturity at par value. The
current rate on 19-year US treasuries is 3%. Two years later, you
look in the newspaper, and find that the yield on comparable debt
is 7.080%, how much is the bond currently worth?

Suppose that you purchased a A rated $5000 annual coupon bond
with an 6.9% coupon rate and a 13-year maturity at par value. The
current rate on 13-year US treasuries is 3%. Two years later, you
look in the newspaper, and find that the yield on comparable debt
is 9.345%, how much is the bond currently worth?

Suppose that you purchased a A rated $5,000 annual coupon bond
with an 6.7% coupon rate and a 11-year maturity at par value. The
current rate on 11-year US treasuries is 3%. Two years later, you
sell the bond, and for a yield of 7.922%, what was your capital
gain (+) or capital loss (-) in dollars and cents? (make your
answer positive for a gain, negative for a loss)

Suppose that you purchased a A rated $5,000 annual coupon bond
with an 6.1% coupon rate and a 8-year maturity at par value. The
current rate on 8-year US treasuries is 3%. Two years later, you
sell the bond, and for a yield of 4.787%, what was your capital
gain (+) or capital loss (-) in dollars and cents? (make your
answer positive for a gain, negative for a loss)

You have just purchased a $1,000 bond with 7% annual coupon and
maturity in 10 years.
If the yield‐to‐maturity is 6%, how much did you pay for the
bond?
If, 1 year later and on the day after you receive the first
coupon, the bond’s yield‐to‐maturity goes up to 8%, and you need
cash and have to liquidate your investment. What will be your
selling price?
What will be your 1‐year holding period rate of return?

1)
how much should you pay for a $1000 bond with 6% coupon, annual
payments, and 16 years to maturity if the interested rate is 6%?
2) how much should you pay for a $1000 zero coupon bond with 5
years to maturity if the interest rate is 5%?
3) what is the rate of return for an investor who pays $1061
for a 3 year bond with an annual coupon payment of 6% and sells the
bond 1 year...

A $5000 annual coupon bond with an 5.3% coupon rate and a
18-year maturity at par value. The current rate on 18-year US
treasuries is 3%. Two years later, you look in the
newspaper, and find that the yield on comparable debt is 7.152%,
how much is the bond currently worth?

You have just purchased a regular bond. The has a face value of
$400,000. The bond has a coupon rate of 5.1%. Coupons are paid
annually. The yield to maturity on the bond is 4.8%. The bond has
22 years to maturity. How much did you pay for the bond today?

You have just purchased a 10-year, $1,000 par value bond. The
coupon rate on this bond is 6%, with interest being paid
semi-annually. If you expect a 5% rate of return on this bond, how
much did you pay for it? Show calculations.

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