Question

A bond was issued three years ago at a price of $1,040 with a maturity of six years, a yield-to-maturity (YTM) of 5.25% 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 6.50% compounded semi-annually?

Answer #1

Current Price is **$ 987.53**

Step-1:Calculation of semi annual coupon payment | ||||||

Semi annual coupon payment | =pmt(rate,nper,pv,fv) | |||||

= $ 30.18 | ||||||

Where, | ||||||

rate | = | Semi annual discount rate | = | 5.25%/2 | = | 0.02625 |

nper | = | Semi annual number of period | = | 6*2 | = | 12 |

pv | = | Price at the beginning | = | $ -1,040.00 | ||

fv | = | Face Value | = | $ 1,000.00 | ||

Step-2:Calculation of current Price | ||||||

Current Price | =-pv(rate,nper,pmt,fv) | |||||

= $ 987.53 | ||||||

Where, | ||||||

rate | = | 6.50%/2 | = | 0.0325 | ||

nper | = | 3*2 | = | 6 | ||

pmt | = | $ 30.18 | ||||

fv | = | $ 1,000.00 |

A bond was issued three years ago at a price of $1,040 with a
maturity of six years, a yield-to-maturity (YTM) of 5.25%
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 6.50% compounded semi-annually?

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immediately after the receipt of today's coupon if the YTM has
risen to 8.00% compounded semi-annually?

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?

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maturity of six years, a yield-to-maturity (YTM) of 5.00%
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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 5.75% compounded semi-annually?
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maturity of six years, a yield-to-maturity (YTM) of 4.75%
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
fallen to 3.50% compounded semi-annually?

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maturity of six years, a yield-to-maturity (YTM) of 8.00%
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
fallen to 6.75% compounded semi-annually?
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$1,086

A bond was issued three years ago at a price of $934 with a
maturity of six years, a yield-to-maturity (YTM) of 4.75%
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
fallen to 3.50% compounded semi-annually?
Question 14 options:
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a
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yield-to-maturity of 6.50% compounded semiannually and semi annual
coupons. what is the price of this bond today immediately after the
receipt of today's coupon if the YTM has fallen to 5.50% compounded
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Assume an investor bought the bond at the time it was issued and
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