Question

two years ago you bought a bond wih a 5% coupon that matured ten years from...

two years ago you bought a bond wih a 5% coupon that matured ten years from now. today the interest rate in similar bonds is 10%. this bond now sells at?
a. discount
b. par value
c. premium

Homework Answers

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
Arthur bought a semiannual coupon bond 12 years ago. The bond has a coupon rate of...
Arthur bought a semiannual coupon bond 12 years ago. The bond has a coupon rate of 9% and matures in 8 years. The next interest payment is scheduled for six months from today. If the yield on similar risk investments is 11.5%, what is the expected price of the bond two years from today?
26. 5 years ago, you bought a Ford bond. At the time of the purchase, the...
26. 5 years ago, you bought a Ford bond. At the time of the purchase, the bond had a coupon rate of 8% paid semiannually, a par value of $1,000, and a time to maturity of 25 years. What is the expected price of the bond today if the interest rate is 12%? Select one: a. $701.65 b. $699.07 c. $697.43 d. 703.87
a 20 year, 8% coupon rate, $1,000 par bond that pays interest semi-annually bought five years...
a 20 year, 8% coupon rate, $1,000 par bond that pays interest semi-annually bought five years ago for $850. this bond is currently sold for 950. what is the yield on this bond? a.12.23% b.11.75% c.12.13% d.11.23% an increase in interest rates will lead to an increase in the value of outstanding bonds. a. true b. false a bond will sell ____ when coupon rate is less than yield to maturity, ______ when coupon rate exceeds yield to maturity, and...
Suppose you bought a Terrapin Aluminum Company bond two years ago. At the time, the semiannual...
Suppose you bought a Terrapin Aluminum Company bond two years ago. At the time, the semiannual bond had 10-years to maturity, $1000 par value, with a coupon rate of 2%. Two years ago when you bought the bond, the market interest rates were 1%. You still own the bond today but interest rates have increased to 3%. When you purchased the bond two years ago, what was its price, and what is the new price of the bond today? Group...
Rick bought a 20-year bond when it was issued by Macroflex Corporation 5 years ago (NOTE:...
Rick bought a 20-year bond when it was issued by Macroflex Corporation 5 years ago (NOTE: the bond was issued 5 years ago. In calculating price today, remember it has only 15 years remaining to maturity). The bond has a $1,000 face value, an annual coupon rate equal to 7 percent and the coupon is paid every six months. If the yield on similar-risk investments is 5 percent, a. What is the current market value (price) of the bond? b....
6 years ago you bought a bond with a par value of $1000 for $950. The...
6 years ago you bought a bond with a par value of $1000 for $950. The bond has a coupon rate of 5%. You purchased the bond for $950. You collected the first coupon five years ago and you reinvested it at a rate of 5%. The coupon you collected four years ago was reinvested at 6%. The one you collected three years ago was reinvested at 3%. The coupons collected two years ago and last year were not invested....
Three years ago, you bought a bond for $737.64. At that time, the bond had seven...
Three years ago, you bought a bond for $737.64. At that time, the bond had seven years remaining until maturity. The bond has a coupon rate of 8 percent (stated as an annual rate) and a par value of $1,000. Coupon payments are made semiannually. a. What was the yield to maturity when you purchased the bond three years ago? b. Assume the yield to maturity today is the same as the yield to maturity you computed in part A....
4. Two years ago, you purchased a zero coupon bond with a 5-year time to maturity,...
4. Two years ago, you purchased a zero coupon bond with a 5-year time to maturity, a 6% YTM, and a par value of $1,000. The bond’s YTM today is 5%. If you sell the bond today, what is the annual rate of return on your investment?
4. Two years ago, you purchased a zero coupon bond with a 5-year time to maturity,...
4. Two years ago, you purchased a zero coupon bond with a 5-year time to maturity, a 6% YTM, and a par value of $1,000. The bond’s YTM today is 5%. If you sell the bond today, what is the annual rate of return on your investment? v
The following describes an AAA-rated Plain Vanilla bond with a coupon of 6% and a maturity...
The following describes an AAA-rated Plain Vanilla bond with a coupon of 6% and a maturity of 10 years from today. Question 2a: At the end of year seven, what would be the value of the bond if interest rates on similar bonds are now 8%? Question 2b: Is this bond now trading at a premium, discount, or at par value?