Question

A $1,000 par value bond with four years left to maturity pays an interest payment semiannually...

A $1,000 par value bond with four years left to maturity pays an interest payment semiannually with a 8 percent coupon rate and is priced to have a 7.3 percent yield to maturity. If interest rates surprisingly increase by 0.5 percent, by how much would the bond’s price change? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))
  Bond's price (Click to select)decreasedincreased by $ .

PLEASE SHOW THE WORK

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Hence, Bond price decreased by $17.15

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A $1,000 par value bond with 5 years left to maturity pays an interest payment semiannually...
A $1,000 par value bond with 5 years left to maturity pays an interest payment semiannually with a 8 percent coupon rate and is priced to have a 5.5 percent yield to maturity. If interest rates surprisingly change by 0.27 percent, by how much would the bond’s price change?
A.Bond Prices A $1,000 par bond that pays interest semiannually has a quoted coupon rate of...
A.Bond Prices A $1,000 par bond that pays interest semiannually has a quoted coupon rate of 7%, a promised yield to maturity of 7.7% and exactly 6 years to maturity. What is the bond's current value? B.Bond Prices A $1,000 par bond that pays interest semiannually has a quoted coupon rate of 5%, a promised yield to maturity of 5.7% and exactly 11 years to maturity. The present value of the coupon stream represents ______ of the total bond's value....
Question 1 a. A bond that pays interest semiannually is selling for 100% of its $1,000...
Question 1 a. A bond that pays interest semiannually is selling for 100% of its $1,000 par value. The bond has a 4% coupon rate and paid a coupon 1 month ago. What is this bond's invoice price? b.A bond has a $1,000 par value,10 years to maturity, a 4.5% coupon, and currently sells for $1,037. The bond pays coupons semiannually. The bond is callable 3 years from today with a call price of $1,020. What is this bond's yield...
A callable bond with a $1,000 par value and a 7.5% coupon rate pays interest semiannually....
A callable bond with a $1,000 par value and a 7.5% coupon rate pays interest semiannually. The bond matures in 20 years but is callable in 5 years at a price of $1,100. Today, the bond sells for $1,055.84. What is this bond’s yield to call expressed as a bond equivalent yield? 3.49% 3.90% 6.18% 6.98% 7.80%
 The market price is ​$725 for a 12 -year bond ($1,000 par​ value) that pays 12...
 The market price is ​$725 for a 12 -year bond ($1,000 par​ value) that pays 12 percent annual​ interest, but makes interest payments on a semiannual basis ​(6 percent​ semiannually). What is the​ bond's yield to​ maturity? The​ bond's yield to maturity is?. (Round to two decimal​ places.)
??(Yield to? maturity)?The market price is $ 700 for a 10 year bond ($1,000 par value)...
??(Yield to? maturity)?The market price is $ 700 for a 10 year bond ($1,000 par value) that pays 9 percent annual interest, but makes interest payments on a semiannual basis ?(4.5 percent semiannually). What is the? bond's yield to? maturity? The? bond's yield to maturity is___% (Round to two decimal places.)
The market price is ​$775 for a 20​-year bond ​($1,000 par​ value) that pays 11 percent...
The market price is ​$775 for a 20​-year bond ​($1,000 par​ value) that pays 11 percent annual​ interest, but makes interest payments on a semiannual basis ​(5.5 percent​ semiannually). What is the​ bond's yield to​ maturity? A. The​ bond's yield to maturity is (?) %.
A $1,000 par value bond is currently valued at $1,055. The bond pays interest semi-annually, has...
A $1,000 par value bond is currently valued at $1,055. The bond pays interest semi-annually, has 10 years to maturity, and has a yield to maturity of 7.3 percent. The coupon rate is _____ percent and the current yield is _____ percent.
1. A 7.10 percent coupon bond with 15 years left to maturity is priced to offer...
1. A 7.10 percent coupon bond with 15 years left to maturity is priced to offer a yield to maturity of 7.9 percent. You believe that in one year, the yield to maturity will be 7.4 percent. What is the change in price the bond will experience in dollars? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) 2. Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) (Round your answers...
​(Yield to​ maturity)  The market price is ​$775 for a 16​-year bond ​($1,000 par​ value) that...
​(Yield to​ maturity)  The market price is ​$775 for a 16​-year bond ​($1,000 par​ value) that pays 11 percent annual​ interest, but makes interest payments on a semiannual basis ​(5.5 percent​ semiannually). What is the​ bond's yield to​ maturity?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT