Question

par value. coupon rate. year to m. yield to m. price $1,000.00        8%                5.         &

par value. coupon rate. year to m. yield to m. price
$1,000.00        8%                5.             12%              ?
$5,000.00.       6%               15.            7%                ?
$5,000.00.       12%              5.             11?               ?
$1,000.00.        5.                  5.             5%                ?

FIND the price for the bond in the following table:

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

a)

Coupon = 0.08 * 1000 = 80

Price = Coupon * [1 - 1 / (1 + r)n ]/ r + FV / (1 + r)n

Price = 80 * [1 - 1 / (1 + 0.12)5] / 0.12 + 1000 / (1 + 0.12)5

Price = 80 * 3.60478 + 567.42686

Price = $855.81

b)

Coupon = 0.06 * 5000 = 300

Price = Coupon * [1 - 1 / (1 + r)n ]/ r + FV / (1 + r)n

Price = 300 * [1 - 1 / (1 + 0.07)15] / 0.07 + 5000 / (1 + 0.07)15

Price = 300 * 9.10791 + 1,812.2301

Price = $4,544.60

c)

Coupon = 0.12 * 5000 = 600

Price = Coupon * [1 - 1 / (1 + r)n ]/ r + FV / (1 + r)n

Price = 600 * [1 - 1 / (1 + 0.11)5] / 0.11 + 5000 / (1 + 0.11)5

Price = 600 * 3.6959 + 2,967.25664

Price = $5,184.79

d)

Here, since coupon rate is equal to yield to maturity, price will be equal to the par value.

Price = $1,000

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
Bond prices. Price the bonds from the following table with annual coupon a. Find the price...
Bond prices. Price the bonds from the following table with annual coupon a. Find the price for the bond in the following​ table: Par Value Coupon Rate Years to Maturity Yield to Maturity Price ​$1,000.00 9​% 30 11​% ​? ​$1,000.00 10​% 10 8​% ​? ​$5,000.00 11​% 5 10​% ​? ​$5,000.00 8​% 5 12​% ​?
Par Value : $1,000 Coupon Rate : 8% Maturity period : 5 Years Market Price :...
Par Value : $1,000 Coupon Rate : 8% Maturity period : 5 Years Market Price : 1,110 Instructions: Please using Trial and Error to find the expected rate of return with PVIFA and PVIF Table and the Duration with the following information: Duration of a zero-coupon bond equals its maturity. It is only for zero-coupon bonds that duration and maturity are equal. Indeed, for any bond that pays some cash flows prior to maturity, its duration will always be less...
Find the price for the bond in the following​ table:  ​(Round to the nearest​ cent.) Par...
Find the price for the bond in the following​ table:  ​(Round to the nearest​ cent.) Par Value Coupon Rate Years to Maturity Yield to Maturity Price $1,000 5% 10 5% ? $5,000 10% 15 7% ? $5,000 7% 15 9% ? $5,000 6% 30 8% ? Part 2. .Find the price for the bond in the following​ table: Par Value Coupon Rate Years to Maturity Yield to Maturity Price $5,000 8% 10 11% ? $1,000 6% 20 5% ? $1,000...
Price the following: 12-year, $1000 par value, 6% semi-annual coupon bond whose current nominal yield-to-maturity (YTM)...
Price the following: 12-year, $1000 par value, 6% semi-annual coupon bond whose current nominal yield-to-maturity (YTM) is 8%. 10-year, $1000 par value, 8% quarterly coupon bond whose current nominal YTM is 7%. 30-year, $1000 par value, zero-coupon bond whose current nominal YTM is 9.5%. 13-year, $1000 par value, 8% monthly coupon bond whose current nominal YTM is 10%. 5-year, $500 par value, 8% semi-annual coupon bond whose current nominal YTM is 8.25%
Par Value Coupon Rate Years to Maturity Yield to Maturity Price ​$1,000 11% ​5 ? $1,070...
Par Value Coupon Rate Years to Maturity Yield to Maturity Price ​$1,000 11% ​5 ? $1,070 ​$5,000 6% 30 ​? ​$2,820 ​$5,000 9​% 5 ​? ​$5600 ​$1,000 12% ​5 ​? $1300
Par value Coupon interest rate Years to maturity Current value $500 8% 20 $320 Yield to...
Par value Coupon interest rate Years to maturity Current value $500 8% 20 $320 Yield to maturity  The bond shown in the following table pays interest annually a. Calculate the yield to maturity ​ (YTM​) for the bond. b. What relationship exists between the coupon interest rate and yield to maturity and the par value and market value of a​ bond? Explain.
#1. Expected Rate of Return: Par Value : $1,000 Coupon Rate : 8% Maturity period :...
#1. Expected Rate of Return: Par Value : $1,000 Coupon Rate : 8% Maturity period : 5 Years Market Price : 1,110 Instructions: Please using Trial and Error to find the expected rate of return with PVIFA and PVIF Table. # 2 : Duration Duration of a zero-coupon bond equals its maturity. It is only for zero-coupon bonds that duration and maturity are equal. Indeed, for any bond that pays some cash flows prior to maturity, its duration will always...
bond prices par value. coupon. year to maturity. yieldmat. price $1000.00       7%           15             &n
bond prices par value. coupon. year to maturity. yieldmat. price $1000.00       7%           15                         6%          ? $1000.00.      9%            20.                       8%          ? $5000.00.       10%         20.                      7%           ? $1000.00.      11%          30.                      5%           ?
A 5-year $100 par value bond bearing a 8% coupon rate payable semiannually is selling at...
A 5-year $100 par value bond bearing a 8% coupon rate payable semiannually is selling at par value. If prevailing market rates of interest suddenly go to 10% convertible semiannually, find the percentage change in the price of the bond.
Find the yield to maturity for a 15-year, 8% annual coupon rate, $1,000 par value bond...
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%
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT