Question

Mr. Simpson buys a $1000 semi-annual coupon bond paying interest at 11.3%/year compounded semi-annually and redeemable at par in 16 years. Mr. Simpson's desired yield rate is 14.3%/year compounded semi-annually. After 9 years he sells the bond. Interest rates have dropped and the bond is sold to yield a buyer 12.8%/year compounded semi-annually. Determine the sale price.

Answer #1

Calculation of sale price of bond after 9 years is shown below

Mr. Simpson buys a $1000 semi-annual coupon bond paying interest
at 6.8%/year compounded semi-annually and redeemable at par in 12
years. Mr. Simpson's desired yield rate is 9.8%/year compounded
semi-annually. How much did he pay for the bond?

A $1000 bond bearing interest at 8% payable semi-annually
redeemable at par on February 1, 2020, was purchased on October 12,
2013, to yield 7% compounded semi-annually. Determine the purchase
price.

A $1000 bond bearing interest at 8% payable semi-annually
redeemable at par on February 1, 2020, was purchased on October 12,
2013, to yield 7% compounded semi-annually. Determine the purchase
price.

A $4,500 bond pays interest at 7% compounded semi-annually. The
bond is redeemable in 1 year 6 months, and is purchased to yield
8%.
Find the purchase price of the bond.
Calculate the premium or discount.

A $85,000 bond with a coupon rate of 7.00%, payable
semi-annually, is redeemable in 12.5 years. What was the purchase
price of the bond, when the yield rate was 5.00% compounded
semi-annually?
Round to the nearest cent

A $15 000, 8% bond with semi-annual interest coupons redeemable at
par in seven years is bought to yield 7% compounded semi-annually.
Determine the amount of premium or discount.

A $8000 bond that pays 6% semi-annually is redeemable at par in
18 years. Calculate the purchase price if it is sold to yield 8%
compounded semi-annually.

Helen purchased a $1,500 bond that was paying a coupon rate of
5.20% compounded semi-annually and had 5 more years to mature. The
yield at the time of purchase was 6.70% compounded
semi-annually.
a. How much did Helen pay for the bond?
Round to the nearest cent
b. What was the amount of premium or discount
on the bond?
(click to select)PremiumDiscount
amount was
Round to the nearest cent

Brady purchased a $25 000, 10.5 percent bond redeemable at par
with semi-annual coupon payments. He purchased the bond 10 years
before maturity to yield 12 percent compounded semi-annually. Six
years after purchasing the bond (four years before maturity), what
would be his selling price if the yield to maturity has not
changed?

Lionel purchased a $5,000 bond that was paying a coupon rate of
4.40% compounded semi-annually and had 8 more years to mature. The
yield at the time of purchase was 5.80% compounded
semi-annually.
a. How much did Lionel pay for the bond?
Round to the nearest cent
b. What was the amount of premium or discount
on the bond?
(click to select)Premium or Discount
amount was ____
Round to the nearest cent

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