Question

A bond pays an annual coupon on a face value of $1,000. The bond is currently trading at $950 and its yield is 7%. I buy the bond today and sell it immediately after I receive the next coupon one year from now, at which time its yield is still 7%. If my capital gain is 5%, then what is the bond's coupon rate?

Answer #1

Consider a bond that pays 6% annual coupon on a face value of
$1000 and has 5 years to maturity. Suppose you buy the bond at a
time when its yield to maturity is 10%. Assumer further that
immediately after you buy the bond, the market interest rate YTM
declines to 8%. You hold the bond for two years and sell it at the
end of the second year when YTM is still 8%.
a) Calculate the annualized two year...

a) What is the value of a 6-year, 7.7% coupon, $1,000 face value
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Round to the nearest cent.
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value. If the yield to maturity is 8.5%, what percentage of the
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Answer in percent, rounded to one decimal place.
c) Your company is undertaking a new investment...

A bond with a face value of $1,000 has annual coupon payments of
$100 and was issued 10 years ago. The bond currently sells for
$1,000 and has 8 years remaining to maturity. This bond's
______________ must be 10%.
I. yield to maturity, II. coupon rate
a. Neither I not II
b. I only
c. I and II
d. II only

1. A $1,000 face value bond of Acme Inc. pays an annual coupon
and carries a coupon rate of 8.25%. It was a 30 year bond when
issued and it has 11 years remaining to maturity. If it currently
has a yield to maturity of 5.75%.
(a) What interest payments do bondholders receive each year?
(b) What is the current bond price?
(c) What is the bond price if the yield to maturity rises to
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1. Analyze the 20-year, 8% coupon rate (Semi-annual payment),
$1,000 par value bond. The bond currently sells for $1,218. What's
the bond's yield to maturity?
A. 5.06%
B. 5.68%
C. 5.38%
D. 6.10%
2. Analyze the 20-year, 8% coupon rate (Semi-annual payment),
$1,000 par value bond. The bond currently sells for $1,218. What's
the bond's current yield, and capital gain yield? (Please show your
work)
A. 6.57%, -0.47%
B. 6.07%, -0.69%
C. 6.57%, -0.47%
D. 6.07%, 0.69%

A 10 year Treasury bond with face value of $1000 is currently
offering 8% annual coupon rate and 6% yield to maturity. Which of
the following statements about the bond is NOT true?
The market price of bond is higher than $1000.
A year from now if the yield to maturity stays the same, the
market price of the bond will be higher than what it is today.
If you buy the bond today and hold it until the bond...

A 15-year bond with a face value of $1,000 currently sells for
$1050. Which of the following statements is CORRECT?
a. The bond's current yield exceeds its coupon rate
b. the bond's current yield is less than its yield to
maturity
c. the bond's yield to maturity is less than its coupon rate
d. the bond's current yield is equal to its coupon rate
e. if the yield to maturity stays constant until the bond
matures, the bond's price will...

1. Suppose that you own a $1,000-face-value coupon bond which
had a 10% coupon rate and 10 years to maturity. Moreover, its
current price is $1,000.
A.What is the yield to maturity?
B.Now suppose that the investors expect the interest rate will
rise to 13% in next year. What will be the bond price next
year?
C.Calculate thecurrent yield,the expected rateof capital
gain(2pts),and the expected rate of return if you have to sell this
bond next year.

Consider a 6¼%-annual coupon bond, with a 30-year
time-to-maturity and a face value of $1,000 that you buy right now.
At the time of the purchase the YTM is 10%. Your plan is to sell
the bond immediately after you receive the 27th coupon
payment. The YTM is expected to remain constant.
What is the minimum selling price for the bond at the time of
the sale?
$906.74
$653.60
$1,099.78
646.49
What is the duration at the time of the...

What is the value of a 18-year, 7.5% coupon, $1,000 face value
bond that pays quarterly coupons, if its yield to maturity is 7%?
Round to the nearest cent.

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