Question

A bond has a Face Value of $1000, Coupon rate of 7%, Yield/market interest is 11%. The bond has a time to maturity of 9 years. Assuming annual coupon payments, how does a 1% increase in interest rates affect the price of the bond? What is the new price of the bond?

Answer #1

As the yield increases, the price of bond decreases.

Consider a coupon bond that has a face value of $1000, has a
yield of 16%,
pays a semi annual coupon of 70, and matures in one year. Assuming
that the
bond will pay the face value amount that the cost coupon payment on
the
maturity date. Calculate the price of the bond.

Gugenheim, Inc. offers a 7 percent coupon bond with annual
payments. The yield to maturity is 8.3 percent and the maturity
date is 7 years. What is the market price of a $1,000 face value
bond?
A $1000 face value bond has two years left to maturity, 5.6%
coupon rate with annual coupons, and is currently trading at $915.
What is the YTM on this bond?

A.
You own a bond with the following features:
Face value of $1000, Coupon rate of 5% (annual) 8 years to
maturity. The bond is callable after 4 years with the call price of
$1,058.
If the market interest rate is 4.17% in 4 years when the bond
can be called, if the firm calls the bond, how much will it save or
lose by calling the bond? State your answer to the nearest penny
(e.g., 84.25). If there...

1. A semiannual coupon bond with a coupon rate of 7% and face
value of $1000 trades at $1250. It matures in 12 years. What is its
yield to maturity (YTM)? Answer in percent and round to two decimal
places.
2. A 5 year semiannual coupon bond with a face value of $1,000
trades at $902. The market-determined discount rate is 7%. What is
the coupon rate? Answer in percent and round to two decimal
places.

1.A 12-year bond has a 9 percent annual coupon, a yield to
maturity of
11.4 percent, and a face value of $1,000. What is the price of the
bond?
2.You just purchased a $1,000 par value, 9-year, 7 percent
annual coupon bond that pays interest on a semiannual basis. The
bond sells for $920. What is the bond’s nominal yield to
maturity?
a. 7.28%
b. 8.28%
c. 9.60%
d. 8.67%
e. 4.13%
f. None of
the above
3.A bond with...

ABC Company is issuing a new bond with a par value of $1000 and
a coupon rate of 7%. The time to maturity is 16 years and the Yield
to Maturity is 4.15%. If coupon payments are semi-annual, what is
today's price of this bond?

4. A bond has a face value of $1000, a coupon rate of 6%, paid
semi-annually, has 23 years to maturity, and the market rate of
interest is 7%. What is the value of the bond today?

. Suppose in 2020 you buy 2% coupon rate, $1000 face value bond
for $1000 that has 3 years left till maturity. Suppose in 2021,
when interest rates increase to 5%, you decide to sell it. a)
Calculate the selling price of your bond in 2021. How did its value
change because of the interest rate increase? What was your
one-year rate of return?

What is the fair value of a $1000 face value, fixed coupon bond
with a coupon rate of 3.7%, yield to maturity of 4.0%, semi-annual
coupon payments and 8 years to maturity?
A. $887.24
B. 998.03
C. 979.63
D. 968.17

A bond has a face value of $1,000, a coupon rate of 8%, and a
maturity of 10 years. The bond makes semi-annual coupon
payments. The bond’s yield to maturity is
9%. In Excel, the =PV formula can be used to find the
price of the bond. Fill in the table with the
appropriate values:
RATE
NPER
PMT
FV
TYPE
Repeat problem , but with annual coupon payments.
RATE
NPER
PMT
FV
TYPE

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