Question

A $5,000 annual coupon bond with an 5.8% coupon rate and a 7-year maturity at par value. The current rate on 7-year US treasuries is 3%. Two years later, you sell the bond, and for a yield of 7.328%, what was your capital gain (+) or capital loss (-) in dollars and cents?

Answer #1

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)

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?

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 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?

What is the coupon rate for a par value bond with ten years
until maturity, annual compounding, a current price of $1,280.95,
and a yield to maturity of 7%?

An investor bought a 20-year bond at par with a semiannual
coupon and a 3% yield-to-maturity. One year later, due to a decline
in interest rates, she sold the bond at a 2% yield to maturity.
What was her capital gain or loss?
15.7%
8.6%
18.7%
16.4%
14.3%

Find the yield to maturity for a 15-year, 8% annual coupon rate,
$1,000 par value bond if the bond sells for $1,218 currently? We
assume that interest is paid on this bond annually.
2.90%
5.79%
6.64%
6.86%
Using the information from above, calculate the bond’s current
yield.
6.20%
6.57%
6.80%
7.18%
Using the information from Question 43 and 44, calculate the
bond’s capital gain yield.
-0.78%
0.78%
6.22%
6.57%

43.Find the yield to maturity for a 15-year, 8% annual coupon
rate, $1,000 par value bond if the bond sells for $1,218 currently?
We assume that interest is paid on this bond annually.
2.90%
5.79%
6.64%
6.86%
Using the information from Question 43, calculate the bond’s
current yield.
6.20%
6.57%
6.80%
7.18%
Using the information from Question 43 and 44, calculate the
bond’s capital gain yield.
-0.78%
0.78%
6.22%
6.57%

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