Question

Answer #1

Price of zero coupon bond = Present value of maturity amount | ||||

Step 1 : | Price at 6% yield | |||

PV= FV/(1+r)^n | ||||

Where, | ||||

FV= Future Value | ||||

PV = Present Value | ||||

r = Interest rate | ||||

n= periods in number | ||||

= $1000/( 1+0.06)^12 | ||||

=1000/2.0122 | ||||

= $496.97 | ||||

Step2 : | Price at yield 7% | |||

PV= FV/(1+r)^n | ||||

Where, | ||||

FV= Future Value | ||||

PV = Present Value | ||||

r = Interest rate | ||||

n= periods in number | ||||

= $1000/( 1+0.07)^12 | ||||

=1000/2.25219 | ||||

= $444.01 | ||||

Step 3 : | Percentage change in price | |||

=($444.01-496.97)/496.97 | ||||

=-10.66% |
||||

What is the percentage change in price for a zero coupon bond if
the yield changes from 6.5 % to 5.5%? The bond has a face value of
$1,000 and it matures in 10 years. Use the price determined from
the first yield, 6.5 %, as the base in the percentage calculation.
The percentage change in the bond price if the yield changes from
6.5% to 5.5% is nothing __________%. (Round to two decimal
places.)

1. Calculate bond price if the coupon payment is 8%, yield for
the bond is 10%, bond's face value is 1,000 and matures in 6, if
paid semi-annually
(Enter the answer in dollar format without $ sign or thousands
comma -> 3519.23 and not $3,519.23 or 3,519.23)
2. Calculate the annual coupon payment if the semi-annual coupon
paying bond price is $803, the yield for the bond is 5%, the bond's
face value is $1,000 and matures in 6 years....

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...

1. A 9-year zero coupon bond has a yield to maturity of
11.8 percent, and a par value of $1,000. What is the
price of the bond?
2. A 7-year bond has a 8 percent coupon rate with the interest
paid in semi annual payments. The yield to maturity of
the bond is 2.3 percent, and a face value of
$1,000. What is the price of the bond?
3. A 12-year bond has a 9 percent annual coupon, a yield to
maturity of...

A zero coupon bond with a face value of $1,000 is issued with an
initial price of $492.96. The bond matures in 15 years. What is the
implicit interest, in dollars, for the first year of the bond's
life? Use semiannual compounding.

1 (a) Determine the approximate percentage change in
price for a bond whose coupon rate changes from 10% to 12% if the
duration is -6.76%.
(b) What would be the new price if the old price was
GHS5.78?
2. A 10-year, 7% coupon
bond with a face value of $1,000 is currently selling for $871.65.
Compute your rate of return if you sell the bond next year for
$880.10.
3. One-year interest rate over the next five years are
expected...

Calculate the yield-to-maturity of a zero coupon bond that is
trading at $994.00, matures in exactly 2 months and has a face
value of $1,000.

Company A offers a zero coupon bond with a yield to maturity of
25 percent. The bond matures in 1 years and has a face value of
$1,000. What is this bond worth today? Assume annual
compounding.
A) $1000
B) $800
C) $1250
D) $1562.5
E) $640

A zero coupon bond with a face value of $1,000 is issued with an
initial price of $565.01. The bond matures in 20 years. What is the
implicit interest, in dollars, for the first year of the bond's
life? Assume semiannual compounding.

PRICE AND YIELD
An 8% semiannual coupon bond matures in 6 years. The bond has a
face value of $1,000 and a current yield of 8.4446%.
What is the bond's price? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 7 for the
definition of the current yield and to Table 7.1.) Do not round
intermediate calculations. Round your answers to two decimal
places.

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