Question

You buy a 30 year bond that pays a 4% coupon for par (100% of face value), almost instantaneously the Federal Reserve Bank announces a rate hike which now means that the same bond would be issued with a 6% coupon. So how much do you lose if you were to sell your bond? Hint: you are solving for a PV and 6% is your rate or “I”.

Answer #1

New bond price will be $724.70

**Hence, Amount of loss will be $275.30**
($1,000-$275.30)

The Piedmont Flyers have issued a 30-year bond with a face value
of $1000 that pays semiannually with a 4% coupon rate. The market
is yielding 6%, what is the current selling price of the bond?
pv
fv
pmt
n
i
include formulas

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?

1. Suppose you buy a 30 year bond that pays a 6% coupon
for the first 15 years and a 8% coupon for the last 15 years. The
YTM of this bond is 7%. What is the price of the bond?
2. Suppose you buy a 6 year 12% bond that has a YTM of
9%. What is the price of the bond?

A 14-year semiannual coupon bond with a YTM of 8.2% sells for
par. If you buy the bond today and then sell it next year at a YTM
of 7.7%, what is your capital gain on this investment? Enter your
answer as a percentage rounded to two decimal places (e.g., 5.64%).
(Please show step by step using N, I/Y, PV, PMT and FV on a
calculator as well if needed.)

Suppose you buy a 30 year bond that pays a 6% coupon for the
first 15 years and a 8% coupon for the last 15 years. The YTM of
this bond is 7%. What is the price of the bond?
（please provide formula）

You buy a 10-year $1,000 par value 4% annual-payment coupon bond
priced to yield 6%. You sell the bond at year-end. What is your
holding period return (i.e., HPR)?
3.34%
6.00%
4.00%
5.20%

8.You buy a bond with $1,000 face value, 2 years to maturity and
a 5% coupon rate.
The market interest rate is 6%. What price are you willing to
pay?
After 1 year, you cash in the coupon payment, and you sell the
bond again. Market interest rates are now 3%. What price can you
now sell the bond for?
What is your rate of return after 1 year?
Question options:
Buying price: About $981.67
Selling price: $981.67
Rate of...

1, You own a bond that pays $60 in annual interest, with a
$1,000 par value. It matures in 20 years. Your required rate of
return is 6 percent.
a, Value of bond = ??
b, If you required
rate of return increases to 10%, what is the value of bond?
c, If you required
rate of return decreases to 4% , what is the value of bond?
d, Assume that the
bond matures in 3 years instead of 20...

You buy a 12-year 8 percent annual coupon bond at par value,
$1,000. You sell the bond 3 years later for $1,150. What is your
rate of return over this 3 year period?

A Chinese steel producer has issued a 3-year, 8 percent coupon
bond with face value RMB 1,000,000. i) How much is this bond worth
to you if the interest rate is 8%? ii) How much is this bond worth
to you if the interest rate is 10%? iii) Suppose you buy this bond
at par and hold it for one year. When you sell the bond, after the
coupon for the first year having been paid, the interest rate is...

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