Question

Today, a bond has a coupon rate of 9.82 percent, par value of 1,000 dollars, YTM of 5.44 percent, and semi-annual coupons with the next coupon due in 6 months. One year ago, the bond’s price was 986.71 dollars and the bond had 11 years until maturity. What is the current yield of the bond today? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Help on homework, thanks

Answer #1

face value = 1000

semiannual coupon rate =9.82%/2 = 4.91%

semiannual coupon amount = 1000*4.91% = 49.10

years to maturity now = 11-1 = 10

semiannual periods to maturity (n) = 10*2 =20

YTM = 5.44%

semiannula YTM (i) = 5.44%/2 =2.72%

Bond price formula = Coupon amount * (1 - (1/(1+i)^n)/i + face value/(1+i)^n

(49.1*(1-(1/(1+2.72%)^20))/2.72%) + (1000/(1+2.72%)^20)

=1334.413678

Current yield of bond = semiannual coupon * number of coupons in year/current bond price

=49.1*2/1334.413678

=0.07359037277

So current yield is 0.0736

1. Today, a bond has a coupon rate of 8.18 percent, par value of
1,000 dollars, YTM of 6 percent, and semi-annual coupons with the
next coupon due in 6 months. One year ago, the bond’s price was
1,022.04 dollars and the bond had 19 years until maturity. What is
the current yield of the bond today? Answer as a rate in decimal
format so that 12.34% would be entered as .1234 and 0.98% would be
entered as .0098.
2....

2. Today, a bond has a coupon rate of 8.4 percent, par value of
1,000 dollars, YTM of 4.82 percent, and semi-annual coupons with
the next coupon due in 6 months. One year ago, the bond’s price was
1,041.94 dollars and the bond had 17 years until maturity. What is
the current yield of the bond today? Answer as a rate in decimal
format so that 12.34% would be entered as .1234 and 0.98% would be
entered as .0098.
3....

HW9 #1)
Today, a bond has a coupon rate of 6.62 percent, par value of
1,000 dollars, YTM of 11.3 percent, and semi-annual coupons with
the next coupon due in 6 months. One year ago, the bond’s price was
969.92 dollars and the bond had 10 years until maturity. What is
the current yield of the bond today? Answer as a rate in decimal
format so that 12.34% would be entered as .1234 and 0.98% would be
entered as .0098.

1. One year ago, a bond had a coupon rate of 10.5 percent, par
value of $1000, YTM of 7.96 percent, and semi-annual coupons.
Today, the bond’s price is 916.6 and the bond has 6 years until
maturity. What was the current yield of the bond one year ago? The
next coupon is due in 6 months. Answer as a rate in decimal format
so that 12.34% would be entered as .1234 and 0.98% would be entered
as .0098.

1. One year ago, a bond had a coupon rate of 9.78 percent, par
value of $1000, YTM of 7.12 percent, and semi-annual coupons.
Today, the bond’s price is 1,038.21 and the bond has 9 years until
maturity. What was the current yield of the bond one year ago? The
next coupon is due in 6 months. Answer as a rate in decimal format
so that 12.34% would be entered as .1234 and 0.98% would be entered
as .0098.

HW9 #2)
One year ago, a bond had a coupon rate of 11.1 percent, par
value of $1000, YTM of 5.42 percent, and semi-annual coupons.
Today, the bond’s price is 1,076.21 and the bond has 9 years until
maturity. What was the current yield of the bond one year ago? The
next coupon is due in 6 months. Answer as a rate in decimal format
so that 12.34% would be entered as .1234 and 0.98% would be entered
as .0098.

#1) Cy owns investment A and 1 bond B. The total value of his
holdings is 900 dollars. Bond B has a coupon rate of 4.9 percent,
par value of $1000, YTM of 10.5 percent, 22 years until maturity,
and semi-annual coupons with the next coupon due in 6 months.
Investment A is expected to produce annual cash flows forever. The
next cash flow is expected to be 60.4 dollars in 1 year, and
subsequent annual cash flows are expected...

1. Bonds issued by Fairfax Paint have a par value of 1000
dollars, were priced at 906.54 dollars six months ago, and are
priced at 829.08 today. The bonds pay semi-annual coupons and just
made a coupon payment. If the bonds had a percentage return over
the past 6 months (from 6 months ago to today) of -2.33 percent,
then what was the current yield of the bonds 6 months ago? Answer
as a rate in decimal format so that...

#12 Bonds issued by Oxygen Optimization were priced at 906.89
dollars 6 months ago. The bonds pay semi-annual coupons, have a
coupon rate of 13.04 percent, just made a coupon payment, and have
a face value of 1,000 dollars. If the bonds had a percentage return
over the past 6 months (from 6 months ago to today) of 2.25
percent, then what is the current yield of the bonds today? Answer
as a rate in decimal format so that 12.34%...

1. Cy owns investment A and 1 bond B. The total value of his
holdings is 1,517 dollars. Bond B has a coupon rate of 8.4 percent,
par value of $1000, YTM of 8.42 percent, 17 years until maturity,
and semi-annual coupons with the next coupon due in 6 months.
Investment A is expected to produce annual cash flows forever. The
next cash flow is expected to be 70.82 dollars in 1 year, and
subsequent annual cash flows are expected...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 24 minutes ago

asked 27 minutes ago

asked 31 minutes ago

asked 36 minutes ago

asked 36 minutes ago

asked 37 minutes ago

asked 45 minutes ago

asked 51 minutes ago

asked 53 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago