Question

Consider a 30-year 7% coupon bond. The par value is $1,000 and the price is $769.40...

Consider a 30-year 7% coupon bond. The par value is $1,000 and the price is $769.40 with a YTM of 10%. What is the interest earned from the reinvestment of the coupons (i.e. the interest on interest portion only)?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
Consider a 10-year, $1,000 par value bond that pays annual coupons. Coupon rate of the bond...
Consider a 10-year, $1,000 par value bond that pays annual coupons. Coupon rate of the bond is 9%. If the current price of this bond is $900, we can infer that the yield-to-maturity (YTM) of this bond is _________. A. less than 9% B. equal to 9% C. Not enough information D. greater than 9%
Consider a bond (with par value = $1,000) paying a coupon rate of 7% per year...
Consider a bond (with par value = $1,000) paying a coupon rate of 7% per year semiannually when the market interest rate is only 6% per half-year. The bond has 3 years until maturity.    a. Find the bond's price today and 6 months from now after the next coupon is paid. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)      Current price ____________ $      Price after six months __________ $       b. What...
1. What is the price of a bond with the following features? Face Value  = $1,000 Coupon...
1. What is the price of a bond with the following features? Face Value  = $1,000 Coupon Rate = 7% (stated as an ANNUAL rate) Semiannual coupon payments Maturity = 7 years YTM = 6.34% (Stated as an APR) State your answer to the nearest penny (e.g., 984.25) 2. Assume you buy a bond with the following features Bond maturity = 4 Coupon Rate = 5% Face Value = $1,000 Annual Coupons When you buy the bond the market interest rate...
You purchased a $1,000 par value 20-year 4% coupon bond with semi-annual payments for $1,000. Immediately...
You purchased a $1,000 par value 20-year 4% coupon bond with semi-annual payments for $1,000. Immediately after the purchase, interest rates increased and the yield to maturity and coupon reinvestment rate increased to 6%. (the coupons themselves stayed at 4%) Interest rates and the yield to maturity remain at 6% and you sell the bond 5 years later, having reinvested the coupons at 6%. How much is in your account (proceeds from bond sale and value of all coupons after...
What is the duration of a 3-year bond with $1,000 par value, 10% coupon and 7%...
What is the duration of a 3-year bond with $1,000 par value, 10% coupon and 7% YTM? Question 12 options: 3.44 years 2.34 years 2.93 years 2.75 years
Consider the following semi-annual coupon bond: $1,000 par value; 5 years until maturity; 7% coupon rate;...
Consider the following semi-annual coupon bond: $1,000 par value; 5 years until maturity; 7% coupon rate; YTM of 6%. Calculate the bond’s price today. NOTE: This is a coupon bond. Please show all work
Consider a 30 year coupon bond with a face value of $1,000 that pays $55 annual...
Consider a 30 year coupon bond with a face value of $1,000 that pays $55 annual coupons (beginning one year from today). Assume that you invest each coupon in a bank that pays 7% interest. On the maturity date, how much money do you have (in total) from the bond? Suppose that you bought the bond at issue for $860.84. What is your (average) annual return on the investment over the 30 years? A) 7.00% B) *6.80% C) 7.60% D)...
Consider a 12-year bond with a par value of $1,000 and an 10% annual coupon rate....
Consider a 12-year bond with a par value of $1,000 and an 10% annual coupon rate. If interest rates change from 11% to 9% the bond's price will: a) increase by $136.53 b) decrease by $163.84 c) increaes by $163.84 d) decrease by $136.53
A 30-year, $1,000 par value bond has an annual payment coupon of 7.5%. The bond currently...
A 30-year, $1,000 par value bond has an annual payment coupon of 7.5%. The bond currently sells for $910. If the yield to maturity remains at its current rate what will the price be 10 years from now?
1. Today, a bond has a coupon rate of 8.18 percent, par value of 1,000 dollars,...
1. Today, a bond has a coupon rate of 8.18 percent, par value of 1,000 dollars, YTM of 6 percent, and semi-annual coupons with the next coupon due in 6 months. One year ago, the bond’s price was 1,022.04 dollars and the bond had 19 years until maturity. What is the current yield of the bond today? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098. 2....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT