Question

Harry considers to buy 1,000 bonds. The bond is semi-annual coupon bond with 10-year maturity, $1,000 par value bond with a 10 percent annual coupon, and 10 percent annual required rate of return? How much does it cost now if he wants to receive all the coupon payments and par values during the 10-year period? What would be the value of the bond if, just after it had been issued, the expected inflation rate rose by 3 percentage points, causing Harry to require a 13 percent return? What would happen to the bonds' value if inflation fell, and required rate of return declined to 7 percent?

Answer #1

Mike considers to buy 1,000 bonds. The bond is semi-annual
coupon bond with 10-year maturity, $1,000 par value bond with a 10
percent annual coupon, and 10 percent annual required rate of
return? How much does it cost now if he wants to receive all the
coupon payments and par values during the 10-year period? What
would be the value of the bond if, just after it had been issued,
the expected inflation rate rose by 3 percentage points, causing...

A 3.375%, 10-year bond with semi-annual coupon payments and a
face value of $10,000 has just been sold at par.
What are the cash flows to the bond?
What is the (annual) required return on the bond?
If a 10-year zero-coupon bond were marketed at the same
required return as in part b), what would be the price of a $10,000
face value bond?
Immediately after issuance, if the required return increases by
0.50% per year, compounded semi-annually, what will...

General Mills has a $1,000 par value, 10-year to maturity bond
outstanding with an annual coupon rate of 7.89 percent per year,
paid semiannually. Market interest rates on similar bonds are 11.30
percent. Calculate the bond’s price today.

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...

One year ago Dell sold 10 year $1000 par value semi annual
coupon bonds at a price of $950.00 per bond. Market rate was 9
percent at the time. Today the market rate is 9.5 percent,
therefore the bonds are currently selling:
a. at a discount
b. at a premium
c. at par
d. below market price

28.You purchase a Chrysler bond with a par value of $1,000 that
carries a semi-annual coupon rate of 4%, has a 5-year maturity and
sells at par. (7 points)
a.What will be the bond’s price one year later if the YTM has
decreased by 1%?
b.If you sell the bond at the price (a) above, what was is your
HPR (Holding Period Return)? Round your answer to two (2) decimal
places.
29.The Nickelodeon Manufacturing Corp. has a series of $1,000...

Consider a 6-year, $1,000 par bond that pays semi-annual
coupon. Its yield to maturity is 7% and is selling for $1,095.452?
Find the coupon rate of this bond.

d) The company is planning to issue 10-year semi-annual coupon
bonds with a coupon rate of 6% and a face value of $1,000. The
effective annual yield to maturity of investors is expected to be
8% per annum. Calculate the required number (expressed in integer)
of semi-annual coupon bonds to raise $20 million.
e) Alternatively, XYZ Ltd is looking into issuing 15-year
zero-coupon bonds with a face value of $1,000. The desired nominal
yield to maturity of investors is expected...

1) Swanson Inc bonds have a 12% coupon rate with semi-annual
coupon payments. they have 22 years to maturity and a par value of
$1,000.
a) Compute the value of Swanson bonds if your required rate of
return is 10%.
b) Suppose you decide to buy the bond, and immediately
afterwards interest rates drop to 9.5%. How much value has the bond
gained or lost?

Consider a 6-year, $1,000 par bond that pays
semi-annual coupon. Its yield to maturity is 7% and is selling for
$1,095.452? Find the coupon rate of this bond.

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