Question

You purchased a 15-year bond 12 years ago at a yield to maturity of 9.16%. The bond has a face value of $1,000 and a coupon rate of 9.00%. If the investors’ required rate of return on this bond has stayed the same for 12 years, what is the price of the bond today?

$995.88

$973.05

$965.31

$1,020.97

Answer #1

You purchased a 20-year bond 15 years ago at a yield to maturity
of 7.56%. The bond has a face value of $1,000 and a coupon rate of
9.00%, paid semi-annually. If the investors’ required rate of
return on this bond has stayed the same for 15 years, what is the
price of the bond today?
$1,000.00
$1,058.17
$1,146.13
$1,059.94

One year ago, you purchased an 8% coupon rate bond when it was
first issued and priced at its face value of $1,000. Yesterday the
bond paid its second semi-annual coupon. The bond currently has 7
years left until maturity and has a yield to maturity of 12%. If
you sell the bond today, what will your return have been from this
investment during the year you held the bond and collected the
coupon payments?

A bond was issued three years ago at a price of $1,060 with a
maturity of six years, a yield-to-maturity (YTM) of 7.75%
compounded semi-annually, and a face value of $1,000 with
semi-annualy coupons. What is the price of this bond today
immediately after the receipt of today's coupon if the YTM has
risen to 9.00% compounded semi-annually?

Two years ago, you purchased a bond for $1036.67. The bond had
two years to maturity, a coupon rate of 8%, paid annually, and a
face value of $1,000. Each year, you reinvested all coupon interest
at the prevailing reinvestment rate shown in the table below. Today
is the bond's maturity date. What is your realized compound yield
on the bond?
Time
Prevailing Reinvestment Rate
0 (purchase date)
6.0%
End of Year 1
7.2%
End of Year 2 (maturity date)...

One year ago, you purchased an 8% coupon rate bond when it was
first issued and priced at its face value of $1,000. Yesterday the
bond paid its second semi-annual coupon. The bond currently has 7
years left until maturity and has a yield to maturity of 12%. If
you sell the bond today, what will your return have been from this
investment during the year you held the bond and collected the
coupon payments?
a. -10.6%
b. -1.9%
c....

You have purchased a bond one year ago. When you purchased this
bond, it has a face value of $2500 with an annual coupon rate of 5%
and 10 years to maturity. Calculate the price of this bond today if
the required annual rate of return of similar bonds is 8 per cent.
[15 marks]
b. How does your answer to (a) change with semi-annual coupon
payments and a semi-annual discount rate of 4 per cent? Comment on
your answer....

4. Two years ago, you purchased a zero coupon bond with a 5-year
time to maturity, a 6% YTM, and a par value of $1,000. The bond’s
YTM today is 5%. If you sell the bond today, what is the annual
rate of return on your investment?

4. Two years ago, you purchased a zero coupon bond with a 5-year
time to maturity, a 6% YTM, and a par value of $1,000. The bond’s
YTM today is 5%. If you sell the bond today, what is the annual
rate of return on your investment? v

Six months ago you purchased a $100,000, 2% coupon bond with 7
years to maturity. The bond makes semi-annual coupon payments, and,
at the time of purchase, had a yield-to-maturity of 2.40%, annual
rate, compounded semiannually.
a) Calculate price (per hundred dollars of face value) you paid
for the bond.
b) Today, after noticing that the yield has dropped to 2.10%,
you sell the bond. What is the current price (per hundred dollars
of face value)?
c) Calculate your gains...

You purchased a $1,000 bond with a 4.6% semi-annual coupon and
15 years to maturity six years ago at a price of $855. If the yield
has remained constant, what should be the price of the bond
today?
A. $959.46
B. $592.55
C. $900.24
D. $898.05

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