Question

What should a 11-year $1,000 10% semi-annual coupon bond sell for, if the prevailing interest rate...

What should a 11-year $1,000 10% semi-annual coupon bond sell for, if the prevailing interest rate is 4% (compounded semi-annually)?

Homework Answers

Answer #1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You are considering a coupon bond (par=$1,000) that pays semi-annual interest with a coupon rate of...
You are considering a coupon bond (par=$1,000) that pays semi-annual interest with a coupon rate of 6%. The bond currently has a bid price of 116.89 and an ask price of 117.00. If the last interest payment was made 60 days ago, and there are 180 days between the last interest payment and the next interest payment, what is the invoice price of the bond? A. $1,180.0 B. $1,170.0 C. $1,190.6 D. $1,168.9 You purchase a 10-year T-note which has...
a 10-year bond, $1,000 face value bond with a 8% coupon rate and semi-annual coupons has...
a 10-year bond, $1,000 face value bond with a 8% coupon rate and semi-annual coupons has a yield to maturity of 12%. the bond should be trading at the price of? round to nearest cent
Mr. Simpson buys a $1000 semi-annual coupon bond paying interest at 11.3%/year compounded semi-annually and redeemable...
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.
Mr. Simpson buys a $1000 semi-annual coupon bond paying interest at 6.8%/year compounded semi-annually and redeemable...
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?
The market price of a bond is $900 for a 10-year bond that pays interest semi-annually...
The market price of a bond is $900 for a 10-year bond that pays interest semi-annually at a coupon rate of 6% per annum. What is the bond’s expected return, stated on an annual basis compounded semi-annually? What is the bond’s expected return, stated on an annual basis compounded annually?  Show steps on how to solve using excel and the formulas used as well as manually how to solve it
Suppose a​ 10-year, $1,000 bond with an 8.8% coupon rate and​ semi-annual coupons is trading for...
Suppose a​ 10-year, $1,000 bond with an 8.8% coupon rate and​ semi-annual coupons is trading for a price of ​$1,035.81. a. What is the​ bond's yield to maturity​ (expressed as an APR with​ semi-annual compounding)? b. If the​ bond's yield to maturity changes to 9.1% ​APR, what will the​ bond's price​ be?
What is the price of a 4-year bond with a coupon rate of 10% and face...
What is the price of a 4-year bond with a coupon rate of 10% and face value of $1,000? Assume the bond is trading at 10% yield, and that coupons are paid semi-annually. Assume semi-annual compounding. Round your answer to the nearest cent (2 decimal places). What is the yield of a 3-year bond with a coupon rate of 9% and face value of $100? Assume the bond is currently trading at a price of $100, and that coupons are...
Mike considers to buy 1,000 bonds. The bond is semi-annual coupon bond with 10-year maturity, $1,000...
Mike considers to buy 1,000 bonds. The bond is semi-annual coupon bond with 10-year maturity, $1,000 par value bond with a 10 percent annual coupon, and 10 percent annual required rate of return? How much does it cost now if he wants to receive all the coupon payments and par values during the 10-year period? What would be the value of the bond if, just after it had been issued, the expected inflation rate rose by 3 percentage points, causing...
Harry considers to buy 1,000 bonds. The bond is semi-annual coupon bond with 10-year maturity, $1,000...
Harry considers to buy 1,000 bonds. The bond is semi-annual coupon bond with 10-year maturity, $1,000 par value bond with a 10 percent annual coupon, and 10 percent annual required rate of return? How much does it cost now if he wants to receive all the coupon payments and par values during the 10-year period? What would be the value of the bond if, just after it had been issued, the expected inflation rate rose by 3 percentage points, causing...
#3) You are considering investing in a 10-year zero coupon bond that compounds interest semi-annually. The...
#3) You are considering investing in a 10-year zero coupon bond that compounds interest semi-annually. The face value of the bond is $1,000. If the current market rate is 5.90 percent, what is the maximum price you should have to pay for this bond?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT